Goldman Sachs has lowered its oil price predictions due to expected supply surpluses and weak demand growth. The bank now anticipates an average of $63 per barrel for Brent crude and $59 for WTI for the rest of 2025, with projections for 2026 falling further to $58 for Brent and $55 for WTI.
This adjustment reflects expectations of substantial market oversupply, with projections of 0.8 million barrels per day (mb/d) in 2025 and 1.4 mb/d in 2026. Modest global oil demand growth of only 0.3 mb/d in 2025 is expected to further pressure prices amid high supply.
Global Energy Market Adaptation
The revised forecasts arise as global energy markets adapt to slower demand growth, increased production capacity, and changing geopolitical factors.
In simple terms, Goldman Sachs has revised down its expectations for oil prices over the next two years because they believe demand growth will not be strong enough to match increasing supply. According to their updated view, the market will be left with an excess of oil—nearly one million barrels per day in 2025, and even more in 2026. This outlook suggests a downward pull on prices. Even though global oil use is still rising, the pace has slowed to barely a nudge, at just 0.3 million barrels per day in 2025. At the same time, more oil is being pumped out, tipping the balance in favour of surplus.
Now, from where we stand, the implications are fairly straightforward. With forward curves already reflecting parts of these changes, we expect price sensitivity on the long end to inch higher, particularly as these revised numbers settle into the broader market psyche. Term structure is likely to flatten or shift further into contango, which could anchor expectations that storage becomes more appealing. The shift creates openings for those watching closely. Timing into that steepening remains narrow, but the risk asymmetry has altered.
What’s clear is that the model has tilted from tightness to slack. Currie’s team at Goldman did not merely trim forecasts—they signalled a revaluation in their structural narrative. They’ve given weight to macroeconomic headwinds, and appear confident that any attempt for prices to rally meaningfully above mid-$60s may be held back by barrels waiting to re-enter the market.
Implications For Speculative Positioning
These projections also cast a long shadow over speculative positioning. With weakening bullish catalysts and a projected build in supply cushions, we think short-term strategies that lean on price spikes from geopolitical surprise will need to be revisited or kept marginal in exposure size. We suspect volatility will fall in line with softer trend lines unless external shocks reignite risk premiums.
From where we view it, implied vol may soften but won’t collapse—linear exposures will likely consolidate nearer the lower range of expectations. What traders can take from this is that structural bulls must exercise more caution. Any steepening in price beyond a modest range looks less durable now without clear signs of tighter supply or surprise demand-side strength, which these forecasts don’t support.
Readers should consider rolling nearer-dated positions where curve shape allows, and looking again at downside skews on longer-dated options. Those remain attractive given where sentiment now leans. Carrier strategies may be more effective than directional bets under these revised conditions. Not every trade needs to chase momentum—sometimes holding premium against broader structural decay proves the more sustainable approach.
Given the revised balances, earnings from rolling length forward may diminish, though cost-of-carry remains manageable for those operating from storage-backed strategies. One must remain sensitive to refinery margins too, which now fall under pressure if throughput fails to keep pace with input. That creates another level of drag for near-term recoveries.
It’s not a time for assumptions around inevitable price recovery. The supply side seems unwilling to bend quietly, and demand spikes aren’t presenting themselves with urgency. Flexibility will do more good now than a fixed outlook. Let others chase the same rally—we’ll lean into the structure these numbers suggest.
