The company observed that the increased adherence to these cuts demonstrates improved collaboration among OPEC+ members, with the objective of stabilizing the market.
Goldman Sachs indicated in a note, as cited by Reuters, that "any increase in OPEC+ production will be gradual and based on data." The production from Iraq, Kazakhstan, and Russia decreased by 0.5 million barrels per day in November.
Additionally, Saudi Arabia is expected to prolong its voluntary oil production cuts in response to the recent decline in prices, with Goldman now forecasting that these reductions will continue until April 2025 rather than January.
Despite these developments, Brent futures have largely remained within the $70-80 range throughout the year, trading below $74 on November 27.
In a report dated October 11, Goldman Sachs presented potential scenarios for oil prices in the event of supply disruptions:
For a temporary disruption of 2 million barrels per day: If Iran experiences a six-month disruption of this magnitude, Brent prices could temporarily surge to $90 per barrel if OPEC producers swiftly compensate for the shortfall. In the absence of OPEC intervention, prices might reach the mid-$90s in 2024.
For a persistent disruption of 1 million barrels per day: A sustained disruption of this scale, resulting from stricter sanctions enforcement, could elevate Brent prices to the mid-$80s if OPEC gradually mitigates the loss. Without intervention, prices could peak in the mid-$90s by 2025.
Despite projecting a surplus in 2025, Goldman Sachs maintains its average Brent price forecast of $76 per barrel for that year. While geopolitical tensions and OPEC+ production cuts have resulted in short-term supply shortages, the market outlook for the coming year remains uncertain.
During its most recent meeting on November 3, OPEC+ deferred a planned output increase originally scheduled for December by one month. Reports suggest that the group may consider further delays, underscoring its cautious approach to increasing production.
Goldman Sachs has revised its Brent oil price forecast to an average of $80 per barrel for 2023, considering anticipated surpluses for 2025, despite ongoing geopolitical uncertainties.