Goldman Sachs: Brent Crude Oil Price to Hit $94 a Barrel

The new price downgrade is attributed to the ongoing banking crisis.

SEATTLE (Oil Monster): The analysts at Goldman Sachs downgraded their earlier forecast on crude oil prices.

In a research note, the analysts stated that oil prices are unlikely to jump to $100 per barrel this year. Instead, the prices are expected to surge close to $94.50 per barrel, which itself is 35% higher than current levels.

The new price downgrade is attributed to the ongoing banking crisis. The banking stress and fears of a possible recession has resulted in oil price plunge, despite booming demand from China. Historically, prices, especially long-dated prices may recover only gradually after such scarring events, the analysts noted.

The lifting of Covid-19 restrictions by China has resulted in increased oil demand from China. The primary suppliers of oil to China are Russia, the Middle East and the U.S. Goldman Sachs expects the Chinese oil demand to remain at elevated levels in the forthcoming months as well.

The continued shrinking of its balance sheet by the Fed has resulted in many developing and emerging market countries facing a major dollar shortage. Several countries in Africa and Asia are seen finding difficulties in importing oil, which in turn has negatively impacted the overall global oil demand, Goldman Sachs noted.

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