Goldman Sachs expects OPEC+ to increase oil production by 410,000 barrels per day in August. After that, they foresee steady production levels starting in September. The bank is being careful with its oil price predictions due to strong supply growth outside of U.S. shale. Looking ahead, Goldman Sachs predicts Brent crude will average $60 per barrel in 2025 and $56 per barrel in 2026. West Texas Intermediate (WTI) crude is forecasted to average $56 per barrel in 2025 and $52 per barrel in 2026.

Goldman Sachs on Oil Production

Goldman Sachs is projecting a moderate increase in OPEC+ oil production in August, followed by stable supply for the rest of the year. They emphasize that there is plenty of oil available from regions outside U.S. shale, which is holding back any hopes for rising prices. Therefore, they don’t expect prices to increase significantly in the next two years. Their price forecasts support this idea. Brent crude, often considered the global standard, is expected to average $60 per barrel in 2025, which is close to current levels. This suggests Goldman Sachs doesn’t see any sharp price recoveries. In comparison, WTI, which reflects U.S. conditions, is estimated to be slightly lower at $56 for the same year. For 2026, both benchmarks see lower averages, with Brent at $56 and WTI at $52. What does this mean for market positioning? It indicates that expectations for tighter supply, which previously boosted futures contracts, are now tempered by real-world production stability. Notably, their forecast does not indicate a shortage in the market for the next two years.

Market Implications and Strategy

Current prices appear to be capped. This isn’t due to a decrease in demand, but rather because other producers outside of shale are increasing production without needing to raise prices. This keeps futures traders realistic, as there aren’t sudden shortages or barrel scrambles. With expected low volatility and steady production from major suppliers, short-term spreads might not widen significantly. Calendar spreads are likely to stay flat. For now, we wouldn’t anticipate sudden changes in the forward curve without significant disruptions. Long bets on backwardation might require patience rather than offering quick returns. The focus seems to shift towards carry performance and roll yield stability, rather than major price movements. Price drops driven by headlines are unlikely to last unless supported by major structural changes – which are not indicated in the current data. In summary, these forecasts suggest a balanced market with ample supply. Positions should reflect limited upside potential, moderate carry, and low likelihood of sudden price shocks. Create your live VT Markets account and start trading now.

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