Goldman Sachs, Commerzbank hike Brent crude forecasts

Goldman Sachs has raised its Brent crude oil price forecasts, projecting $86 a barrel for the second half of 2024, up from $85 previously, and $82 for 2025, up from $80.

“We still see value in long oil positions given significant portfolio hedging benefits against geopolitical shocks, and an attractive 10% annualized roll yield,” Goldman said in a note published late on Thursday.

Separately, Commerzbank on Friday raised its price forecast for Brent to $90 a barrel at the end of second quarter, with a $90-95 price level expected for the second half of 2024, $5 higher than the previous forecast.

In addition to geopolitical tensions, the prospects of rising oil demand in the second half of the year and restrained supply from OPEC+ until the middle of the year bolster this forecast.

“For the second half of the year, a gradual reversal of the voluntary production cuts by OPEC+ can be expected at best,” Commerzbank said.

OPEC+ members, led by Saudi Arabia and Russia in March agreed to extend voluntary output cuts of 2.2 million barrels per day (bpd) until the end of June to support the market. OPEC+ will meet in June to decide whether to extend output cuts further or return some supply to the market.

A tug of war between tense geopolitics and looser fundamentals would likely keep Brent prices between around $85/bbl and $95/bbl, barring any major geopolitical surprises, Citi added in a note.