Goldman Sachs Cut Oil Price Forecast to Below $90 by Year-End

Goldman Sachs trimmed down oil price projection by almost 10% due to increased supply and slower demand for crude, a week after Saudi Arabia announced another million barrels per day cut from July.

Goldman lowered its Brent projection for December from $95 to $86 per barrel, according to a report published late Sunday. The investment bank also reduced its December WTI price forecast from $89 to $81.

This is Goldman’s third downward revision of the forecast in the past six months, and it comes despite Saudi Arabia’s statement last week that it will reduce output by another million barrels per day beginning in July.

“Significant supply beats from Iran and Russia have driven speculative positioning to near record-lows,” Goldman analysts led by the bank’s Global Head of Commodities Research Jeffrey Currie said in the report.

Economists at Goldman Sachs noted that despite a “sharp initial drop” of 1.5 million barrels per day, Russian supply had almost entirely recovered.