Goldman Sachs stated on Thursday that regardless of the outcome of the U.S. presidential election in November, the incoming administration will have limited tools to significantly increase domestic oil production next year.
In a note to clients, the US investment bank highlighted that the strategic petroleum reserve inventories are at low levels, and any relaxation in regulations may only have a limited impact on enhancing long-term oil supply in the United States.
Following the release of positive U.S. economic data that surpassed analysts’ expectations, oil prices experienced a slight increase on Friday. This development raised investor optimism about heightened crude oil demand from the largest energy consumer globally.
The September contract for Brent crude futures traded at approximately $82 per barrel, while U.S. West Texas Intermediate crude for September was priced around $78.
Goldman Sachs foresees Brent crude prices fluctuating between $75 and $90 in 2025, expecting stable oil demand and market equilibrium due to trend-like growth in gross domestic product (GDP) and coordinated efforts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
The bank expressed skepticism regarding the imposition of tariffs on U.S. crude imports, deeming such measures improbable in the current trade policy environment.
Goldman Sachs predicts a potential $11 decrease in oil prices next year stemming from reduced demand and GDP if the U.S. imposes a 10% across-the-board tariff on imported goods.
However, if the Federal Reserve postpones interest rate cuts beyond 2025 due to elevated core inflation rates, tariffs could have a more substantial impact, causing oil prices to drop by as much as $19. This scenario would result in Brent crude being valued at $62 in the fourth quarter of 2025, as opposed to the current forecast of $81, as indicated by the bank.
