Goldman Sachs Raises Brent Forecast to $120 per Barrel After Three-Month Reversal

In September Goldman lowered its 2024 Brent average to $80 per barrel citing weak demand and ample inventories. By December the bank reversed, citing OPEC+ production cuts, slower non-OPEC supply growth, and sustained Russian crude flows despite sanctions. The shift aligns with documented Saudi and Russian decisions to withhold barrels rather than defend market share.

State actors pursue revenue stability over volume. Saudi Arabia extended voluntary cuts through Q1 2024 to defend fiscal breakeven near $90. Russia redirected exports to Asia via shadow fleet tankers, limiting the price-cap effect. These moves tightened the physical market faster than demand destruction from higher rates materialized.

The reversal carries costs for both sides. Higher prices risk accelerating substitution and demand erosion in Europe and Asia while inviting further U.S. SPR releases or antitrust scrutiny of OPEC+. Goldman’s updated call now prices in a 15 percent probability of $120 prints by mid-2024 if compliance holds.

Next data points include January OPEC+ compliance reports and Russian seaborne export volumes tracked by satellite. Any sustained drop below 9 million barrels per day of combined Saudi-Russian output would validate the higher trajectory.