Goldman Sachs is keeping its Brent and WTI price forecasts for 2025 the same. This decision comes as OPEC+ plans to gradually reverse their cuts of 1.65 million barrels per day (mb/d), while OECD commercial stocks remain low. The firm expects average prices in 2026 to be $56 for Brent and $52 for WTI. The risks to the price forecast for 2025-2026 are seen as balanced but slightly tilted towards a price increase. Goldman Sachs believes that by 2026, supply growth in the Americas will likely surpass Russian supply drops and increased global demand, leading to a larger expected oil surplus of 1.9 mb/d, up from a previous estimate of 1.7 mb/d.

OPEC Measures and Market Stocks

Goldman Sachs also thinks there is a chance OPEC+ could fully reverse the 1.65 mb/d cuts. They anticipate that if OECD commercial stocks increase noticeably by late 2025, OPEC+ may pause any quota increases starting January 2026. The outlook maintains steady prices for Brent and WTI for 2025, similar to current forward contracts. This perspective relies on the idea that OPEC+ is beginning to unwind their cuts because OECD stocks are low. The key point in the weeks ahead is managing short-term tightness against the potential for a surplus later. Recent EIA data supports this view, showing an unexpected decrease in crude oil of 3.1 million barrels, contrary to expectations of a slight increase. Additionally, the latest CFTC report from September 2nd indicates that money managers have increased their net long positions in WTI futures and options, reflecting a stronger focus on the current supply-demand situation.

Pricing Strategy and Market Dynamics

For the next few weeks, a good strategy is to have short-term upside exposure, possibly through call spreads on November or December 2025 contracts. The slight upside risk mentioned, along with positive manufacturing data from China, suggests that any price dips could be good buying opportunities. While volatility may stay controlled, the risk of a sharp surge is higher than a downturn before the end of the year. Looking ahead, the expected surplus of 1.9 mb/d in 2026 implies a bearish outlook for future contracts. Traders might consider calendar spreads, selling mid-2026 futures while buying late-2025 contracts to benefit from a developing contango. This aligns with the belief that OPEC+ will halt production increases in early 2026 as inventories rise. We should also note OPEC+’s flexibility, as seen in their significant interventions from 2022 to 2024. The expectation that they will stop quota increases if stocks grow seems valid, given their historical focus on market stability rather than just volume. This creates a price floor while limiting extreme increases beyond 2025. The forecast highlights supply growth in the Americas, especially from non-OPEC sources, which may put downward pressure on WTI relative to Brent. This indicates that the Brent-WTI spread could widen from its current narrow range of about $4.00. Traders might position for this widening by buying Brent futures and selling WTI futures for the same delivery period. Create your live VT Markets account and start trading now.

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