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Economic Times
07-07-2025
- Business
- Economic Times
Oil prices may plunge below $60 as OPEC+ ramps up production — here's what Goldman Sachs and BNP Paribas are predicting for the global energy market
Synopsis Oil prices are expected to fall below $60 per barrel as OPEC+ ramps up production, shaking up the global energy market. With a fresh output boost of 548,000 barrels per day announced for August, this marks the fourth straight month of supply increases. Analysts from Goldman Sachs and BNP Paribas predict Brent crude may drop to $55–$59 by late 2025. Despite strong demand from China, supply is outpacing growth, putting pressure on prices. Recent geopolitical easing, including a ceasefire between Israel and Iran, also removed oil's war-risk premium. Could this mark a turning point in oil market trends? Oil prices are sliding below $60 as OPEC+ boosts output again. With analysts forecasting further drops, rising supply and geopolitical calm are shifting the market. Read why crude oil prices may stay low through 2025 despite strong global demand. Oil prices expected to drop below $60 as OPEC+ boosts output and market shifts- Oil prices are under growing pressure as OPEC+ continues to increase production, with Wall Street analysts now predicting crude futures could fall below $60 per barrel by the end of the year. After several months of steady hikes in supply, OPEC+ announced over the weekend that it would add another 548,000 barrels per day to global output in August. This marks the fourth consecutive monthly increase and signals a significant shift in the group's production strategy—one that could shake up the global energy market in the months ahead. Brent crude recently dropped below $68 , while WTI (U.S. benchmark) dipped to around $65–66 , before a minor rebound. recently dropped below , while dipped to around , before a minor rebound. Analysts believe oil prices could slip below $60 per barrel if the supply surge continues. The main reason oil prices are expected to decline is the steady rise in supply by the OPEC+ alliance. This group, which includes the Organization of the Petroleum Exporting Countries and its allies like Russia, is steadily reversing the deep production cuts made during the pandemic. The August increase of 548,000 barrels per day was larger than expected and follows similar monthly hikes this year. Goldman Sachs analysts, led by Daan Struyven, noted that the production ramp-up shows OPEC+ is trying to regain lost market share while also managing internal cohesion. According to Struyven, this move also puts pressure on U.S. shale producers, who face tighter margins with falling prices. Despite resilient demand—especially from China, the world's largest oil importer—the increasing supply is expected to outweigh consumption growth by late 2025. The average U.S. gas price has dropped to $3.16 per gallon , down 11% year-over-year . , down . Consumers may benefit at the pump, but the long-term impact on U.S. shale producers could be negative. Goldman Sachs projects Brent crude will average $59 in the fourth quarter of 2025 and dip further to $56 by 2026. Meanwhile, BNP Paribas revised its year-end Brent forecast down by $5 to $55 per barrel. However, BNP expects prices to recover in 2026 as supply growth slows down both within OPEC and among non-OPEC producers. As of Monday, West Texas Intermediate (WTI) crude was trading around $67 per barrel, while Brent crude, the global benchmark, was slightly higher at $69 per barrel. Both contracts showed minor gains—less than 1%—but the broader trend still points to a slow and steady decline. Oil prices briefly surged to nearly $80 per barrel last month during the conflict between Israel and Iran. At the time, some analysts warned of worst-case scenarios where crude could hit $120 to $130 per barrel if the situation escalated. However, those fears eased quickly after President Trump announced a ceasefire late last month, removing much of the war-related risk premium. Since then, oil prices have cooled significantly. Year-to-date, WTI is down about 3%, while Brent has dropped roughly 5%, reflecting easing geopolitical risk and stronger supply outlook. Despite the bearish price forecasts, demand remains firm, particularly from key markets like China. Dennis Kissler, senior vice president at BOK Financial, noted that 'the supply picture definitely looks to be elevating; however, the stronger demand is remaining above expectations as well, hence the choppy trade.' This tug-of-war between rising supply and steady demand is creating a volatile environment. While long-term price forecasts lean lower, near-term movements may continue to fluctuate based on regional demand, inventory levels, and short-term geopolitical developments. Analysts do see a silver lining down the road. BNP Paribas believes the oil market could bounce back in 2026, mainly because both OPEC and non-OPEC nations are likely to slow production growth. This slowdown, combined with a possible uptick in demand, could bring balance back to the market and support higher prices. However, that recovery depends on several moving parts—from global economic health to energy policy shifts and investment in renewables. For now, the forecast remains bearish, with Brent likely staying below $60 for the next several quarters. All eyes will be on the next OPEC+ meeting and September's production update. If the group sticks to its current path and continues boosting supply, oil could slide further below $60. But if demand surprises to the upside or supply growth slows unexpectedly, prices could stabilize sooner than expected. For now, traders and consumers alike should prepare for a market that's shifting fast—fueled by policy, politics, and production decisions that could reshape the energy landscape over the next year. Q1: Why are oil prices falling below $60 now? Because OPEC+ is increasing oil supply while demand is steady, pushing prices down. Q2: What is the future forecast for Brent crude oil? Analysts expect Brent crude to average around $59 in late 2025 and $56 in 2026.
Time of India
07-07-2025
- Business
- Time of India
Oil prices may plunge below $60 as OPEC+ ramps up production — here's what Goldman Sachs and BNP Paribas are predicting for the global energy market
Oil prices are expected to fall below $60 per barrel as OPEC+ ramps up production, shaking up the global energy market. With a fresh output boost of 548,000 barrels per day announced for August, this marks the fourth straight month of supply increases. Analysts from Goldman Sachs and BNP Paribas predict Brent crude may drop to $55–$59 by late 2025. Despite strong demand from China, supply is outpacing growth, putting pressure on prices. Recent geopolitical easing, including a ceasefire between Israel and Iran, also removed oil's war-risk premium. Could this mark a turning point in oil market trends? Oil prices are sliding below $60 as OPEC+ boosts output again. With analysts forecasting further drops, rising supply and geopolitical calm are shifting the market. Read why crude oil prices may stay low through 2025 despite strong global demand. Tired of too many ads? Remove Ads Oil prices under pressure: Is $60 the next stop? Brent crude recently dropped below $68 , while WTI (U.S. benchmark) dipped to around $65–66 , before a minor rebound. recently dropped below , while dipped to around , before a minor rebound. Analysts believe oil prices could slip below $60 per barrel if the supply surge continues. Why are oil prices expected to fall below $60? U.S. gas prices drop as global supply surges The average U.S. gas price has dropped to $3.16 per gallon , down 11% year-over-year . , down . Consumers may benefit at the pump, but the long-term impact on U.S. shale producers could be negative. What are analysts forecasting for Brent and WTI crude? Tired of too many ads? Remove Ads How did geopolitical tensions influence recent oil prices? Is demand still strong enough to support prices? Could oil prices rebound in 2026? What should oil watchers look out for next? Tired of too many ads? Remove Ads FAQs: Oil prices are under growing pressure as OPEC+ continues to increase production, with Wall Street analysts now predicting crude futures could fall below $60 per barrel by the end of the year. After several months of steady hikes in supply, OPEC+ announced over the weekend that it would add another 548,000 barrels per day to global output in August. This marks the fourth consecutive monthly increase and signals a significant shift in the group's production strategy—one that could shake up the global energy market in the months main reason oil prices are expected to decline is the steady rise in supply by the OPEC+ alliance. This group, which includes the Organization of the Petroleum Exporting Countries and its allies like Russia, is steadily reversing the deep production cuts made during the pandemic. The August increase of 548,000 barrels per day was larger than expected and follows similar monthly hikes this Sachs analysts, led by Daan Struyven, noted that the production ramp-up shows OPEC+ is trying to regain lost market share while also managing internal cohesion. According to Struyven, this move also puts pressure on U.S. shale producers, who face tighter margins with falling prices. Despite resilient demand—especially from China, the world's largest oil importer—the increasing supply is expected to outweigh consumption growth by late Sachs projects Brent crude will average $59 in the fourth quarter of 2025 and dip further to $56 by 2026. Meanwhile, BNP Paribas revised its year-end Brent forecast down by $5 to $55 per barrel. However, BNP expects prices to recover in 2026 as supply growth slows down both within OPEC and among non-OPEC of Monday, West Texas Intermediate (WTI) crude was trading around $67 per barrel, while Brent crude, the global benchmark, was slightly higher at $69 per barrel. Both contracts showed minor gains—less than 1%—but the broader trend still points to a slow and steady prices briefly surged to nearly $80 per barrel last month during the conflict between Israel and Iran. At the time, some analysts warned of worst-case scenarios where crude could hit $120 to $130 per barrel if the situation escalated. However, those fears eased quickly after President Trump announced a ceasefire late last month, removing much of the war-related risk then, oil prices have cooled significantly. Year-to-date, WTI is down about 3%, while Brent has dropped roughly 5%, reflecting easing geopolitical risk and stronger supply the bearish price forecasts, demand remains firm, particularly from key markets like China. Dennis Kissler, senior vice president at BOK Financial, noted that 'the supply picture definitely looks to be elevating; however, the stronger demand is remaining above expectations as well, hence the choppy trade.'This tug-of-war between rising supply and steady demand is creating a volatile environment. While long-term price forecasts lean lower, near-term movements may continue to fluctuate based on regional demand, inventory levels, and short-term geopolitical do see a silver lining down the road. BNP Paribas believes the oil market could bounce back in 2026, mainly because both OPEC and non-OPEC nations are likely to slow production growth. This slowdown, combined with a possible uptick in demand, could bring balance back to the market and support higher that recovery depends on several moving parts—from global economic health to energy policy shifts and investment in renewables. For now, the forecast remains bearish, with Brent likely staying below $60 for the next several eyes will be on the next OPEC+ meeting and September's production update. If the group sticks to its current path and continues boosting supply, oil could slide further below $60. But if demand surprises to the upside or supply growth slows unexpectedly, prices could stabilize sooner than now, traders and consumers alike should prepare for a market that's shifting fast—fueled by policy, politics, and production decisions that could reshape the energy landscape over the next OPEC+ is increasing oil supply while demand is steady, pushing prices expect Brent crude to average around $59 in late 2025 and $56 in 2026.
Yahoo
28-05-2025
- Business
- Yahoo
Goldman Sachs analyst predicts $4,000 gold, calls it a better hedge than Bitcoin
Gold is set to shine even brighter, according to Goldman Sachs. Daan Struyven, the bank's co-head of global commodities research, says gold could soar to $4,000 per troy ounce by mid-2026, positioning the precious metal as a superior hedge compared to Bitcoin. In a discussion with strategy firm Veriten, Struyven made a compelling case for gold's continued rise, citing supply scarcity and investor demand amid inflation fears. 'Supply is very limited. The vast majority of the available gold supply has already been mined,' Struyven explained. 'And Bitcoin supply, by design, is limited, and I think this limited supply gives some confidence to investors who are worried about runaway inflation which may be caused by a potentially aggressive increase in money supply.' At the time of writing, gold is priced at $3,310.74, while Bitcoin (BTC) is trading at $109,000 after briefly hitting a record high of $111,900 last week. BTC is up nearly 3% in the past week and 18% in the past month. While acknowledging Bitcoin's strong historical returns, Struyven warned that crypto's volatility makes it a less reliable hedge compared to gold. He emphasized Bitcoin's growing correlation with tech stocks as a point of concern. 'Bitcoin has booked higher returns than gold over the past few years, but is also more volatile and sensitive to drawdowns,' he said. 'Both Bitcoin and equities tend to do well when risk sentiment is positive.' Bitcoin is often referred to as "digital gold" because it shares key characteristics with the precious metal, most notably, its scarcity and role as a hedge against inflation. Like gold, Bitcoin has a finite supply; only 21 million BTC will ever exist, and this capped issuance mirrors gold's limited physical supply on Earth. This scarcity makes Bitcoin appealing to investors seeking assets that resist currency debasement, especially during periods of aggressive monetary expansion by central banks. Beyond scarcity, Bitcoin also offers portability, divisibility, and verifiability—qualities that some argue make it an even more efficient store of value than gold. While gold requires secure storage and physical handling, Bitcoin can be transferred globally within minutes at relatively low cost. These attributes have led institutional investors and financial firms to embrace Bitcoin as a modern, tech-enabled alternative to gold in the digital age, reinforcing its growing nickname as "digital gold." Goldman Sachs analyst predicts $4,000 gold, calls it a better hedge than Bitcoin first appeared on TheStreet on May 28, 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
01-05-2025
- Business
- Yahoo
Gold will keep setting records with a recession more likely than people think, Goldman says
Goldman Sachs recommends investors buy gold as recession risks remain high. Gold is preferred over Treasurys for hedging the risk of US government instability. Central banks' dollar diversification efforts should also boot gold demand, Goldman said. Investors should buy gold as the stock market continues to underprice the risk of a recession later this year. That's according to Goldman Sachs, who said in a note on Tuesday that gold, even after its 26% year-to-date surge, could zoom past its price target of $3,700. "We recommend that investors hedge still elevated cyclical recession risk with oil puts and long gold positions," Goldman Sachs' Daan Struyven said. Despite the Trump administration's 90-day tariff pause, "the chances of recession remains unusually high," Struyven warned. The analyst said that the stock market's sharp rebound since its April low also leaves little upside to be had for risk assets, even if trade relations between the US and China improve. "The level of policy uncertainty remains very high, businesses and consumers expect very weak activity, real income growth is likely to compress, financial conditions remain tighter than a few months ago, and US production disruptions are plausible," Struyven said. Investors got their first taste of an economic slowdown on Wednesday, with first-quarter GDP growth coming in at -0.4%. If a recession does strike, Goldman says the S&P 500 could plunge 16% from current levels to $4,600. Struyven prefers gold as a portfolio hedge for investors as compared to Treasurys because Treasurys haven't been providing as much protection against stock market sell-offs as they used to. "Longer-dated US Treasuries and USD longs—may continue to fail protecting against equity risk," Struyven said. Part of the problem is that in recent weeks, typical safe haven assets like Treasurys and the US dollar have been acting like emerging market assets amid the Trump administration's chaotic tariff policies and threats against Fed Chairman Jerome Powell. "The unusual 'EM-style correlations' (equities down/yields higher/USD down) that we have seen recently are a clear signal that markets are concerned about what recent policy actions imply about US governance and institutional credibility," Struyven explained. As investors choose gold over Treasurys to protect their portfolios, the shiny metal could surge past $3,700 and to as high as $4,800 by mid-2026, representing potential upside of 12% and 21%, respectively. And in a tail-risk scenarios, in which there are unprecedented risks to the stability of the Federal Reserve or drastic changes in US reserve policy, gold could soar as high as 36% to $4,500 by the end of the year. Aside from the short-term risks to the economy and stock market, Struyven said there are long-term reasons to be bullish on the metal. One reason is the trend of diversification among central banks around the world, as countries seek to hedge their exposure to a depreciating dollar and limit holdings of an asset that can be subject to extreme sanctions, as Russia has experienced since its invasion of Ukraine. "The diversification out of dollar reserves in the official sector and the associated fivefold increase in central bank purchases of gold since 2022 has driven the bulk of the 76% gold rally since the freezing of Russia's reserves in 2022," Struyven said. Read the original article on Business Insider
Business Insider
30-04-2025
- Business
- Business Insider
Gold will keep setting records with a recession more likely than people think, Goldman says
That's according to Goldman Sachs, who said in a note on Tuesday that gold, even after its 26% year-to-date surge, could zoom past its price target of $3,700. "We recommend that investors hedge still elevated cyclical recession risk with oil puts and long gold positions," Goldman Sachs' Daan Struyven said. Beware of a recession Despite the Trump administration's 90-day tariff pause, "the chances of recession remains unusually high," Struyven warned. The analyst said that the stock market's sharp rebound since its April low also leaves little upside to be had for risk assets, even if trade relations between the US and China improve. "The level of policy uncertainty remains very high, businesses and consumers expect very weak activity, real income growth is likely to compress, financial conditions remain tighter than a few months ago, and US production disruptions are plausible," Struyven said. Investors got their first taste of an economic slowdown on Wednesday, with first-quarter GDP growth coming in at -0.4%. If a recession does strike, Goldman says the Samp;P 500 could plunge 16% from current levels to $4,600. Gold is a better hedge than Treasurys Struyven prefers gold as a portfolio hedge for investors as compared to Treasurys because Treasurys haven't been providing as much protection against stock market sell-offs as they used to. "Longer-dated US Treasuries and USD longs—may continue to fail protecting against equity risk," Struyven said. Part of the problem is that in recent weeks, typical safe haven assets like Treasurys and the US dollar have been acting like emerging market assets amid the Trump administration's chaotic tariff policies and threats against Fed Chairman Jerome Powell. "The unusual 'EM-style correlations' (equities down/yields higher/USD down) that we have seen recently are a clear signal that markets are concerned about what recent policy actions imply about US governance and institutional credibility," Struyven explained. As investors choose gold over Treasurys to protect their portfolios, the shiny metal could surge past $3,700 and to as high as $4,800 by mid-2026, representing potential upside of 12% and 21%, respectively. And in a tail-risk scenarios, in which there are unprecedented risks to the stability of the Federal Reserve or drastic changes in US reserve policy, gold could soar as high as 36% to $4,500 by the end of the year. A long-term reason to be bullish on gold Aside from the short-term risks to the economy and stock market, Struyven said there are long-term reasons to be bullish on the metal. One reason is the trend of diversification among central banks around the world, as countries seek to hedge their exposure to a depreciating dollar and limit holdings of an asset that can be subject to extreme sanctions, as Russia has experienced since its invasion of Ukraine.
