Gold prices steady above $3,400/oz on rate cut bets; PCE data awaited
Investing.com -- Goldman Sachs expects Brent crude prices to decline sharply over the next two years, forecasting levels in the “low $50s by late 2026” as rising supply and stock builds weigh on the market.
The bank’s analysts said the projection stems from “our oil surplus forecast averaging 1.8mb/d in 2025Q4–2026Q4,” combined with the assumption that OECD commercial stocks will account for roughly one-third of global builds.
According to Goldman Sachs, its pricing framework shows that “an increase in OECD commercial stocks by 1 day of demand reduces the fair value of oil prices vs. long-dated prices … by just over $3/bbl.”
So far, the forecast appears on track. The analysts noted that “global visible stocks have already built by nearly 1mb/d year to date and supply is rising,” though OECD landed stocks have lagged other categories such as Chinese inventories and oil on water.
Goldman Sachs said OECD stocks remain the best predictor of Brent timespreads.
The bank’s models suggest OECD inventories will increase at a 0.6mb/d pace through 2026, broadly consistent with its balances.
“Oil on water briefly keeps stocks on land tight but tends to start landing in OECD storage within a month,” the analysts wrote. By contrast, “China inventories compete more persistently with OECD stocks.”
Goldman Sachs expects prices to stay near forwards in 2025 but fall below them in 2026 as OECD builds accelerate. Risks to the outlook include stronger-than-expected Chinese stockpiling or weaker Russian production.
The bank adds that a faster pace of Chinese inventory growth could lift Brent to $62 in 2026, compared with the baseline forecast.