Oil price predictions by Goldman Sachs suggest a drop below $60 per barrel by the year 2026.
Goldman Sachs Predicts Oil Prices to Remain Low Through 2026
Goldman Sachs, a renowned global investment bank, has forecasted that oil prices will stay low throughout 2026. In a communique to its clients, the bank stated that it anticipates the price of Brent crude to average approximately $56 per barrel, with West Texas Intermediate (WTI) projected to be around $52 per barrel, in 2026.
The bank maintained its 2025 price predictions, with Brent crude pegged at $60 per barrel and WTI at $56, indicating a lower oil price trend that is echoed by various banking and industry experts. The lowered projections are predicated on increased oil production from countries outside the Organization of the Petroleum Exporting Countries (OPEC), excluding Russia and US shale oil. Goldman Sachs expects these other producers to augment oil production by around a million barrels per day within the next two years.
Key contributors to this surge in production are countries such as Brazil, Canada, Guyana, and Norway. This additional supply can potentially meet the world's current oil demand growth, which stands at about a million barrels per day.
Regarding US shale oil, Goldman Sachs has suggested that the lower oil prices in 2025 and 2026 may cause US shale oil production to peak earlier and at a lower level than initially projected. Many experts predict this peak will occur around 2027. Similar sentiments were expressed by leaders from oil companies like ConocoPhillips and Occidental Petroleum at the CERAWeek 2025 event in March. The US Energy Information Administration (EIA) also forecasts US oil production to peak around 2027, with production reaching 14 million barrels per day in 2027 and staying at that level for several years before a gradual decline.
Low oil prices may weaken the confidence of oil companies, but numerous US oil companies have strategic plans to safeguard their operations over the next 6 to 18 months with prices above $70. Hence, a significant price drop is unlikely to occur immediately, but it could be substantial by the end of 2026 or early 2027.
In the short term, the US is likely to continue producing more oil, adding to the market's overall supply. Additionally, the oil group OPEC+ has begun gradually increasing its production again and is considering further production increases in 2026. In May, OPEC+ agreed to raise oil production for the second consecutive month, increasing June's output by 411,000 barrels per day.
This potential oversupply could lead to oil prices dropping below $60 per barrel in 2026, as suggested by Goldman Sachs' forecast.
In light of the increased oil production from countries like Brazil, Canada, Guyana, and Norway, the finance sector, including Goldman Sachs, expects these additional barrels to meet the world's current oil demand growth, potentially causing oil prices in the energy industry to drop below $60 per barrel for Brent crude and $52 per barrel for West Texas Intermediate in 2026.
Goldman Sachs has also proposed that the lower oil prices in 2025 and 2026 may impact the US shale oil industry, potentially causing US shale oil production to peak earlier and at a lower level than initially projected, which aligns with the US Energy Information Administration's forecast.
