Goldman Sachs raises fourth quarter oil price forecast due to supply constraints.

Due to decreased production in the Middle East, Goldman Sachs has raised its fourth-quarter forecast for Brent crude oil prices to $90 per barrel and for US West Texas Intermediate oil prices to $83 per barrel. The Goldman Sachs analyst team stated in a report on April 26th, "Due to the upward risk of oil prices, abnormally high refined oil prices, the risk of refined oil supply shortages, and the unprecedented scale of this shock, the economic risks are greater than what our single crude oil benchmark scenario shows." The team is led by Schloven. The forecast assumes that oil exports from the Gulf region in the Strait of Hormuz will return to normal by the end of June and that the recovery in oil production in the Gulf region will slow down. Goldman Sachs estimates that daily oil production in the Middle East will decrease by 14.5 million barrels, leading to a record decline in global crude oil inventories of 11 to 12 million barrels per day in April. Goldman Sachs predicts that the global oil market will shift from a surplus of 1.8 million barrels per day in 2025 to a deficit of 960,000 barrels per day in the second quarter of 2026. Due to the soaring prices of refined oil products, global oil demand is expected to decrease by 1.7 million barrels per day in the second quarter on a year-on-year basis and by 100,000 barrels per day for the whole of 2026. Analysts stated, "As the extreme decline in inventories is unsustainable, if the supply shock lasts longer, a larger decline in demand may be necessary."