Goldman Sachs adjusted its late-2026 oil price outlook on the back of declining inventories in Organisation for Economic Co-operation and Development (OECD) countries, raising its fourth-quarter 2026 forecasts for both main crude benchmarks.
In a note dated Sunday, the bank increased its Brent and West Texas Intermediate (WTI) fourth-quarter 2026 forecasts by $6, to $60 and $56 a barrel respectively. For the full year, Goldman now anticipates Brent to average $64 a barrel, up from a prior $56 estimate, and WTI to average $60, up from $52.
Market action on Monday reflected some easing of geopolitical tensions. Oil prices fell about 1% as the United States and Iran prepared for a third round of nuclear talks, a development the bank implicitly links to a moderation of near-term geopolitical risk. At 0641 GMT Brent crude futures were trading around $71 a barrel, while U.S. WTI crude futures were at $65.75 a barrel.
Goldman said its $60 Brent forecast for Q4 2026 incorporates two key adjustments to its price framework. First, the bank models a gradual fading of a $6 risk premium estimate as geopolitical tensions subside. Second, it factors in a $5 decline in its fair value estimate driven by previous expectations of rising OECD stocks - a shift prompted by the current observation that those inventories have not built up as assumed.
Despite the upward revision to late-2026 prices, Goldman retained its 2026 surplus forecast of 2.3 million barrels per day (bpd). That projection is conditional on two assumptions: that there will be no major supply disruption and that no peace settlement materializes in the Russia-Ukraine conflict.
The bank noted that the 2.3 million bpd surplus reflects offsetting downgrades of 0.2 million bpd to both supply and demand amid slightly softer growth in Asia. On the supply side, Goldman trimmed its 2026 expectations for Kazakhstan, Venezuela, Iran, and Iraq because of realized production shortfalls. Offsetting those downgrades, the bank raised supply prospects for producers in the Americas and for core OPEC countries where spare capacity exists.
Goldman also expects OPEC+ to start a gradual production increase in the second quarter of 2026, reasoning that OECD inventories have not accumulated to levels that would justify deeper cuts or prolonged restraint.
The bank highlighted material downside scenarios for its late-2026 forecasts. It quantified downside risks of $5 for Brent and $8 for WTI in Q4 2026 if potential sanctions relief for Iran or Russia accelerates landed stock builds and unlocks additional supply in the longer term.
Looking further ahead, Goldman projects Brent and WTI to average $65 and $61 respectively in 2027, with both benchmarks rising by December 2027 to $70 for Brent and $66 for WTI. Those December 2027 levels are premised on the bank's assessment of continued solid demand alongside slowing supply growth.
Context and implications
The revisions underline how inventory dynamics in OECD countries and the pace of supply additions remain central inputs to Goldman Sachs' oil price outlook. Changes to regional production trajectories and the timing of OPEC+ production adjustments are key determinants of the bank's forward curve and its scenario risk assessments.