Goldman Sachs Forecasts 2026 Oil Surplus and Lower Prices

Goldman Sachs projects that oil prices will drift lower throughout 2026, driven by a wave of supply that is expected to create a market surplus of 2.3 million barrels per day. The investment bank maintains its 2026 average price forecasts at $56 per barrel for Brent and $52 for West Texas Intermediate (WTI), predicting that prices will bottom at $54 and $50 respectively in the final quarter as OECD inventories grow.

While geopolitical risks involving Russia, Venezuela, and Iran may drive volatility, analysts expect no production cuts from OPEC. The bank forecasts a gradual recovery in 2027, with averages reaching $58 for Brent and $54 for WTI. A more substantial recovery is predicted for the 2030–2035 period, with average prices reaching $75 for Brent and $71 for WTI.

To manage these risks, the bank advises investors to short the 2026Q3-Dec2028 Brent time-spread and suggests that oil producers hedge against downside price risks for 2026.