Goldman Revises Down Brent Price to $110 as Recession Weighs Demand

Goldman Sachs revised down its Brent price forecast for the third quarter of 2022 to $110 a barrel.

The price of an international benchmark Brent crude plunged more than 19% since July as consumers are looking past rising inflation to the possibility for a recession in the market due to an aggressive rate hike and the Fed and slower than expected economic recovery.

The revision in 3Q22 was down from a previous projection of $140 per barrel as the investment banking cited low trading liquidity and a mounting wall of worries, including fear of recession.

Goldman Sachs also revised down its fourth-quarter Brent price estimate to $125 a barrel from an earlier expectation of $130 a barrel.

However, Goldman still believes the case for higher oil prices remains strong, while keeping the 2023 projection unchanged at $125 per barrel.

“We believe that the case for higher oil prices remains strong, even assuming all these negative shocks play out, with the market remaining in a larger deficit than we expected in recent months,” Goldman wrote as reported by Bloomberg.