Investment bank Goldman Sachs has revised its forecasts on oil prices. The bank, which was very optimistic about the outlook, now sees that the fear of a potential banking crisis weighs more than expected. This is reported by the Bloomberg news agency on Sunday.
Earlier, the bank predicted that a barrel would cost more than $100 in the course of 2023. Morgan Stanley and Bank of America were already slightly more cautious with this prediction. Goldman Sachs expected that the high demand for oil in China would drive up prices. However, analysts now see Brent reaching $94 a barrel for the next 12 months, and $97 a barrel in the second half of 2024. Prices are now lower, in part due to the panic within the financial sector, Bloomberg reports.
The bank itself also states that the price drops are a result of the unrest in the banking sector, and the exodus of investors that goes along with it. With such influential events, it often takes time for prices to recover, says a spokesperson.
Since the collapse of the Silicon Valley Bank, there has been great unrest within the financial sector. The plagued Credit Suisse creates even more tension. This nervousness is not limited to the banking sector alone. Oil prices fell to a 15-month low. Following the price drop, the bank now expects OPEC producers to increase production only in the third quarter of 2024. That is also later than Goldberg had expected, Bloomberg reports.