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Goldman Cuts 2024 Brent Forecast with Only a “Modest Deficit”

OIL

Goldman Sachs has cut the Brent forecasts for 2024 by 10$/bbl to an average of 81$/bbl with only a “modest deficit”. The forecast suggests Brent at 80$/bbl in 2025 and the 36-month Brent forecast reduced to 72$/bbl.

  • Current prices look low relative to inventories and interest rates, positioning is depressed and easing financial conditions are expected to support demand growth at 1.5mb/d in 2024.
  • Robust US production is forecast to set against modest demand growth with Brent reaching a high of 85$/bbl in June.
  • US liquids supply growth to increase by 0.9mb/d compared to the previous forecast of 0.5mb/d due to gains in drilling speed, well completion intensity and a falling hurdle rate.
  • A full extension of OPEC+ cuts announced in April 2023 of 1.7mb/d are expected to last through 2025, and the additional 2.2mb/d cuts through 2Q 2024 with a partial phasing out from Jul 2024.

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