Goldman Sachs has elevated its projections for crude oil prices in the fourth quarter of 2026, citing a notable decline in oil reserves within OECD nations. The financial institution now expects Brent crude to reach $60 and West Texas Intermediate (WTI) to hit $56. This revised outlook, issued on February 23, 2026, comes even as the bank continues to assume the absence of supply interruptions from Iran and foresees a persistent surplus in the market throughout the current year.
For the entire year, Goldman Sachs has also recalibrated its average price expectations, now forecasting Brent to average $64 per barrel, an increase from the previous $56, and WTI to average $60, up from $52. These adjustments follow a recent dip in oil prices on Monday, a reaction to the United States and Iran moving towards a third round of nuclear discussions, which somewhat alleviated concerns about escalating regional tensions. Brent futures were trading around $71 a barrel, while WTI stood at $65.75 a barrel at 0641 GMT.
In a detailed report from Sunday, Goldman Sachs indicated that its $60 Brent forecast incorporates a gradual reduction of an estimated $6 risk premium. This premium is expected to diminish as geopolitical tensions ease, alongside a projected $5 decrease in the fair value price due to increasing stockpiles in OECD countries. The bank, however, upholds its 2026 surplus prediction of 2.3 million barrels per day, predicated on no significant supply disruptions and the continuation of the Russia-Ukraine conflict. The firm also adjusted its 2026 supply and demand forecasts, reflecting slightly softer growth in Asia, leading to offsetting downgrades of 0.2 million bpd for both. Furthermore, the bank lowered its 2026 supply outlook for Kazakhstan, Venezuela, Iran, and Iraq due to production shortfalls, while simultaneously raising expectations for the Americas and core OPEC countries with available production capacity. Goldman anticipates that OPEC+ will progressively increase production starting in the second quarter of 2026, given the current state of OECD inventories. Nevertheless, the bank acknowledges potential downside risks of $5 for Brent and $8 for WTI in Q4 2026 if any easing of sanctions on Iran or Russia accelerates stock builds and unlocks greater long-term supply. Looking further ahead, Goldman expects Brent and WTI to average $65 and $61 respectively in 2027, with prices rising to $70 for Brent and $66 for WTI by December 2027, driven by robust demand and decelerating supply growth.
This revised forecast from Goldman Sachs underscores the dynamic nature of the global oil market, where geopolitical developments, inventory levels, and production adjustments continually shape price trajectories. The firm's analysis, while acknowledging near-term fluctuations and ongoing geopolitical factors, ultimately reflects a forward-looking confidence in the fundamental strength of oil demand over the medium term. This perspective highlights the critical balance between global energy requirements and supply management, suggesting a path toward market stability despite underlying complexities.