Goldman Sachs Boosts Q4 Oil Price Forecast Amid Tight OECD Stocks

Goldman Sachs recently revised its oil price outlook for the final quarter of 2026, raising the projected price to $60 a barrel for Brent crude, a $6 increase, with West Texas Intermediate (NYSE: CL) set at $56. The update is largely driven by a decline in stockpiles in Organisation for Economic Co-operation and Development (OECD) countries, signaling tighter market conditions.

Despite this upward price adjustment, Goldman maintains its forecast for a global oil surplus of roughly 2.3 million barrels per day throughout 2026. This surplus estimate assumes continued geopolitical calm, with no Iran supply disruptions and no resolution to the Russia-Ukraine conflict, both factors that would otherwise influence the market.

On the supply side, adjustments were made to account for reduced production in Kazakhstan, Venezuela, Iran, and Iraq due to underperformance compared to prior expectations. Meanwhile, output forecasts for the Americas and core OPEC nations with spare capacity have been raised, balancing the overall supply outlook.

Interestingly, Goldman anticipates that OPEC+ might start cautiously increasing output during Q2 2026, partly because OECD oil inventories haven't built up as initially anticipated. This suggests producers are responding to observed stock shortages rather than flooding the market.

The bank's updated pricing also reflects a $6 risk premium that they expect will gradually fade if geopolitical tensions ease. They estimate that if sanctions on countries like Iran or Russia are lifted sooner than expected, leading to increased supplies, Brent crude prices could face downward pressure by as much as $5, and WTI by $8 in Q4 2026.

Looking beyond 2026, Goldman projects Brent and WTI prices to average $65 and $61 in 2027, climbing to $70 and $66 respectively by the end of that year. The rationale is based on firm demand combined with slower growth in supply, painting a forward-looking picture of gradually tightening market fundamentals.

Market reactions have been muted by ongoing nuclear talks between the U.S. and Iran, which have lessened fears of an immediate supply shock. Prices hovered just below recent highs, with Brent crude futures around $71 and WTI at about $65.75 per barrel during early trading.

Overall, the shifting forecasts highlight the complexity of balancing supply disruptions, geopolitical risks, and inventory trends in determining oil prices. The interplay between these factors continues to create a dynamic environment for crude markets as the year unfolds.