Headline: Goldman Sachs Maps Oil’s Next Moves: Dip Through 2026, Rebound Toward $80 by 2028
Introduction: Goldman Sachs has extended its oil market outlook to 2035, signaling a bumpy near-term path followed by a structurally tighter market. The bank’s roadmap for Brent and WTI points to a “down then up” trajectory that energy producers, traders, and large consumers should be watching closely.
Goldman Sachs expects a pronounced surplus into 2026 as a final wave of non-OPEC (excluding Russia) supply keeps the market oversupplied by about 2 million barrels per day. The bank projects average Brent and WTI prices near $56 and $52 in 2026—below current forward curves—leaving crude “heavy” through mid-2026 and vulnerable to dips into the mid-$50s. Near-term risks cut both ways: prices could slide into the $40s if supply resilience persists or macro conditions deteriorate, but they could also spike above $70 if Russian output declines more quickly.
From 2027, the balance flips. Lower prices are expected to choke non-OPEC growth just as demand continues to rise, pushing the market into deficit in the second half of 2027. To restore long-cycle investment and replace aging production, Goldman Sachs sees Brent gravitating toward about $80 by late 2028. That price is viewed as the long-run clearing level needed to offset structural declines in Russia, fill the investment gap after years of under-spending, and satisfy resilient global demand into the 2030s. The bank does not expect a repeat “rescue” from US shale, while firm refining margins continue to signal the need for higher upstream investment.
Positioning-wise, Goldman recommends expressing the expected surplus by shorting the 2026Q3–Dec 2028 Brent timespread. Producers are advised to hedge downside risk into 2026, while large consumers should consider hedging upside exposure beyond 2028 as the market tightens and long-cycle projects regain traction.
Key Points: – Outlook extended to 2035: near-term softness, medium-term tightening in oil markets. – 2026 seen in surplus by roughly 2 mb/d, with Brent/WTI averages around $56/$52. – Risks skew both ways: potential slide into the $40s or a rebound above $70 on Russian supply losses. – Market expected to move into deficit in H2 2027 as non-OPEC growth slows and demand rises. – Brent targeted near $80 by late 2028 to incentivize long-cycle investment and replace declines. – Strategy: short 2026Q3–Dec 2028 Brent timespread; producers hedge 2026 downside, consumers hedge post-2028 upside.
