Goldman Sachs has raised its forecast for Brent oil prices for December 2023 to $105 per barrel. This increase reflects a revision from the previous estimate of $90, and analysts at the bank, including Daan Struyven and Yulia Zhestkova Grigsby, have adjusted their forecast for oil prices next year to $88 per barrel, which is 10 percent higher than previous predictions.
Significant Supply Risks
Goldman Sachs analysts noted in a report published on November 1 that there are significant supply risks that could likely lead to an increase in risk premiums in the short term. They also emphasized the heightened likelihood of tensions following the U.S. midterm elections on November 3 and potential weaknesses in Middle Eastern oil supply.
Read more: Attacks on the Al-Maida Oil Tanker with Iran's Confirmation in the Strait of Hormuz
Oil Market Volatility
Brent oil prices increased by 14 percent in October, reaching a six-month high, even as crude oil supply from the Middle East returned to pre-war levels. This price increase is attributed to concerns over the potential escalation of conflicts between the United States and Iran following the elections. Former U.S. President Donald Trump has repeatedly hinted at the possibility of resuming airstrikes. In response, Iran's Supreme Leader has called his senior commanders to be on standby for renewed confrontations.
Additionally, maritime attacks and damage to infrastructure are among the factors that could lead to further price increases. Goldman also pointed to risks stemming from Russia's attack on Ukraine, stating that predicting the timing and location of disruptions is nearly impossible; therefore, their base scenario includes a disruption of 1 million barrels per day in global supply by 2027.
In an optimistic scenario, if oil production in the Gulf is 3.5 million barrels per day less than last year's average, Brent oil prices could average $130 next year. However, in a pessimistic scenario, with a faster recovery in production in the region, prices could drop to $60.
Read more: Sanctioned Tankers on the Way to Transfer Iranian Oil Shipments · Gold Price Returns to the $3,900 Channel on Monday, November 1, 1405
