US-based bank Goldman Sachs has revised its oil price forecast amid the deteriorating global economic outlook, following the decision of the Organization of the Petroleum Exporting Countries (OPEC+), including Russia, to cut daily output by two million barrels.
Saying that if the reduction in output, which is the deepest cut since 2020 during the pandemic, continues through December 2023, the price forecast for Brent oil will increase by $25 per barrel due to the lack of investment, low spare capacity and inventories, Goldman Sachs said that there is a potential for higher price increases due to the rapid decrease in inventories.
The bank has raised its 2022 Brent oil price forecast to $104 per barrel from $99 per barrel and 2023 forecast to $110 per barrel from $108 per barrel. In addition, the bank stated that it has increased its Brent oil price forecast for the last quarter of 2022 to $110 per barrel and its forecast for the first quarter of 2023 to $115 per barrel.
Meanwhile, US-based financial services company Morgan Stanley has also raised its oil price forecast for the first quarter of 2023 from $95 per barrel to $100 per barrel, amid expectations of limited oil supply in the future.