GS: $75 per barrel oil price will withstand economic recession expectations

US investment bank Goldman Sachs said that the lower range of its forecast for Brent crude oil price at $75 per barrel will withstand global macroeconomic concerns that have pushed prices down.

According to the Arab World News Agency (AWP), the bank added in a research note that it believes these concerns are temporary, indicating that spot Brent crude prices have fallen six percent over the past week, and the Brent crude futures curve for 2025 has fallen below its lower forecast of $75 per barrel.

Goldman Sachs sets a range for Brent crude oil expectations at between $75 and $90 per barrel. While Brent crude futures prices are currently at around $77 per barrel, according to data from Investing.com.

The bank said in July that it had indicated bullish potential for crude price volatility and bearish potential for its expected range, while it believes that the recent sell-off in oil is largely due to concerns about a recession and the large-scale abandonment of positions in foreign exchange, bonds, stocks and energy markets, which is expected to subside given its economists’ baseline estimate of no recession.

The bank said that oil prices have fallen in recent days in conjunction with a decline in bond yields and stock prices and with limited impact from developments in the Middle East, including the shutdown of Libya’s largest oil field, which produces 0.3 million barrels per day.

It added, “While the increased risks of recession following a weak US employment report for July and the impact of volatile financial conditions on crude demand are pushing the risks around the $75-$90/bbl forecast range to a possible decline in crude prices, particularly in 2025, the bank’s baseline view remains that oil prices will find support in the coming weeks.” The bank explained that the support that crude prices will receive is represented by the fact that its economists rule out a US recession, and that demand for crude is strong in the West and strong in India and is not consistent with a global recession, in addition to the fact that a small amount of speculative positions on crude have room to recover. He added that the risks that may push the price of oil down and that face its forecast range of $75 to $90 per barrel for Brent, especially in 2025, are the increasing risks of recession, the possible imposition of tariffs on trade, high excess capacity for oil production, and Chinese demand continuing to fall short of expectations.