Oil prices are set to further drop into next year from current levels amid a large surplus on the market, with the U.S. benchmark WTI Crude expected to average $53 per barrel in 2026, according to Goldman Sachs.
Early on Tuesday, WTI Crude was trading just above $60 per barrel, at $60.09, up by 0.22% on the day.
The investment bank’s call for next year is that oil prices are on track for further declines and investors should short oil right now, Daan Struyven, co-head of global commodities research at Goldman Sachs, told CNBC on Tuesday.
There is a big increase in inventories on the market now, with global stocks growing by 2 million barrels per day (bpd) in the last 90 days, Struyven said.
The surplus next year will be 2 million bpd on average, Goldman reckons, but notes that 2026 will be the last year of the current big supply wave hitting the market.
Low WTI prices in the low $50s per barrel next year will slow U.S. shale capex and production growth, which will eventually rebalance the oil market, Goldman’s Struyven told CNBC.
The oil market is set to rebalance in 2027 as 2026 will see “the last big oil supply wave the market has to work through,” he added.
In the long term, supply growth will mostly come from OPEC, which has spare capacity and is investing in capacity expansion, according to Struyven.
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Some modest growth could come from the U.S. shale patch, but this would require Brent Crude prices at around $80 per barrel or so toward the end of the decade, Goldman Sachs says.
Earlier this month, Goldman’s analysts revised up their global oil demand numbers for the next decade and a half and now expect demand to grow until at least 2040.
By 2040, oil demand could grow to 113 million bpd, the analysts wrote in a note last week, as cited by Bloomberg. That would compare to 103.5 million bpd in 2024. It would also compare to a previous Goldman prediction of oil demand peaking in 2034.
By Michael Kern for Oilprice.com
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