Goldman raises Q4 oil price outlook on lower OECD stocks

• Goldman's $60 Brent forecast for Q4 2026 includes a $6 risk premium that could fade if geopolitical tensions ease, with downside risks of $5-8 per barrel if sanctions on Iran or Russia are lifted
• The bank expects OPEC+ to begin gradually increasing production in Q2 2026 as OECD inventories have not built up as anticipated
• Goldman projects Brent and WTI to average $65 and $61 respectively in 2027, rising to $70 and $66 by December 2027 on solid demand and slowing supply growth

Goldman Raises Q4 Oil Price Outlook on Lower OECD Stocks

Goldman Sachs has increased its crude oil price forecasts for Q4 2026, raising Brent by $6 to $60 per barrel and WTI by $6 to $56 per barrel, citing lower OECD inventory levels. For the full year 2026, the bank now expects Brent to average $64 (up from $56) and WTI to average $60 (up from $52).

Key Assumptions and Market Context:

Goldman's revised forecast incorporates a gradual fading of a $6 geopolitical risk premium, assuming tensions ease, particularly regarding Iran nuclear talks. The bank continues to assume no Iran-related supply disruption and maintains its 2026 surplus projection of 2.3 million barrels per day, with no major supply disruptions or Russia-Ukraine peace anticipated.

Current spot prices stand at approximately $71 for Brent and $65.75 for WTI, reflecting a 1% decline on U.S.-Iran diplomacy developments.

Supply and Demand Dynamics:

Goldman downgraded 2026 supply outlooks for Kazakhstan, Venezuela, Iran, and Iraq due to production shortfalls, while upgrading expectations for the Americas and core OPEC countries with spare capacity. The bank anticipates OPEC+ will begin gradually increasing production in Q2 2026, given restrained OECD inventory builds.

Risks and Long-term Outlook:

Downside risks of $5 for Brent and $8 for WTI exist if sanctions relief on Iran or Russia accelerates supply increases. Looking ahead to 2027, Goldman forecasts Brent at $65 and WTI at $61 annually, rising to $70 and $66 respectively by December 2027, supported by solid demand and slowing supply growth.

The revisions reflect evolving geopolitical conditions and inventory dynamics in developed economies.