Goldman Sachs, Morgan Stanley Lowered 2025 Crude Oil Price Outlook

SEATTLE (Scrap Monster):  Goldman Sachs and Morgan Stanley- the two leading investment banking groups lowered their price outlook for crude oil for the next year. The global crude market is likely to be in surplus, with prices expected to witness decline over the next one-year period.

Both Goldman Sachs and Morgan Stanley expects average Brent prices to remain below $80 per barrel in 2025. In its latest report, Goldman Sachs revised its oil price forecast to $77 per barrel, whereas Morgan Stanley predicts oil prices to average between $75 per barrel and $78 per barrel.

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The lower price forecasts is primarily on account of anticipated spike in global oil supplies, from including OPEC+ counties. The organization had recently announced its decision to reverse voluntary supply cuts. Saudi Arabia is expected to boost crude production by December 2024.

The prices of the commodity recorded sharp decline during recent months, erasing all the year-to-date gains. The critical decision by the OPEC+ countries to restore oil output, coupled with slowdown in Chinese demand growth may add to oil surplus, thus leading to weaker prices.

Morgan Stanley expects the current tight market balance to return to equilibrium by Q4 this year, which in turn may switch to surplus in 2025.