The international banking and financial services giant, Goldman Sachs, has shared a significant oil price forecast for the year 2024. According to the bank’s report, the production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries, along with increasing demand and global energy market imbalances, could contribute to a rise in oil prices in the near future.
The report suggests that within the next 12 months, oil barrel prices could potentially surpass $100. Goldman Sachs had previously predicted a price of around $93 per barrel for the coming year.
Saudi Arabia and OPEC+ Production Cuts Boosting Prices
The Goldman Sachs report highlights the determination of Saudi Arabia and the OPEC+ alliance to reduce global oil inventories and raise prices. Saudi Arabia, in conjunction with OPEC+ countries, continues to support production cuts to boost prices. It is particularly anticipated that despite production reductions, Saudi Arabia will be able to increase its earnings in the coming year.
Global Increase Expected in Petroleum Demand
The report indicates that there will be a rise in global petroleum demand, with significant increases in demand expected in China, India, and the Middle East. It is predicted that as the economic recovery gains momentum, there will be an upsurge in energy demand. However, it is also expected that the increase in energy prices in the United States and European countries will have a limited impact on economic growth.
Impact of Energy Prices on Monetary Policy
Furthermore, it is anticipated that the increase in energy prices will have a limited negative impact on economic growth in the United States and European countries. The report highlights that concerns related to supply have largely been factored into pricing, and the general consensus is that increases in energy prices have already been absorbed by the market. Therefore, it is stated that the rise in energy prices is not expected to have an adverse effect on the “soft economic landing” objective of the country’s monetary policy.