(Reuters) – Goldman Sachs lowered its forecast for the price of Brent oil for next year by 10 dollars, estimating that it could be between 70 and 90 dollars per barrel, due in particular to a strong production in the United States which should temper a possible increase in prices.

“We still expect range-bound prices and moderate price volatility in 2024. High reserve capacity to support the shock of a tighter supply should limit upward price movements,” write the analysts at the American investment bank in a note dated Sunday.

Goldman Sachs now expects Brent to reach a peak of $85 per barrel in June 2024, and an average of $81/80 in 2024/2025, up from a previously estimated high of $92.

Around 0830 GMT, Brent crude was trading at $77.03 a barrel, down about 20% from multi-month highs reached in September. US light crude West Texas Intermediate (WTI) is trading at $71.91 per barrel.

Analysts at Goldman Sachs forecast that US Lower 48 production will reach 11.4 million barrels per day (mb/d) in the fourth quarter of 2024. They further raised the US overall supply growth forecast by liquid oil for next year at 0.9 mb/d, compared to a previous forecast of 0.5 mb/d.

Goldman Sachs also notes that OPEC’s decision to reduce its supply, the recovery in China, the rebuilding of stocks in the United States and the moderate threat of an economic recession should also limit the risk of a fall in oil prices.

“It is unlikely that Saudi Arabia will ‘flood’ the market in 2024,” write Goldman Sachs analysts, adding that “we expect an extension of the OPEC+ reduction programs announced in April 2023 (1.7 mb /j) until 2025, and the additional package of 2.2 mb/d until the second quarter of 2024″.

(Written by Tina Parate and Brijesh Patel in Bangalore; Claude Chendjou, edited by Blandine Hénault)

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