Goldman Sachs lowers forecast on Brent crude

Oil rigs

Goldman Sachs cut its forecast for Brent crude in Q3 2022 to $110 a barrel, and for the fourth quarter to $125, compared with previous estimates of $140 and $130, respectively.

But the US bank, in its note issued on Aug. 7, did not change its price forecast for 2023 at $125 a barrel, Bloomberg reported.

The bank explained that the recent decline in the price of Brent crude was driven by reduced liquidity and escalating concerns, including those related to recession, China’s strict policy on COVID-19, and the Chinese real estate sector.

"We believe that the potential for higher oil prices remains strong, even assuming all these negative shocks occur, with the market remaining in a larger deficit than the bank has anticipated in recent months," Goldman Sachs analysts said in the note.