The U.S. investment bank said Brent crude futures had been caught between “worsening growth expectations and rising Middle East tensions” in recent weeks.
But, despite apparent apathy in energy markets, the bank anticipated improving fundamentals would lead to higher prices over the coming months.
Analysts at Goldman Sachs predicted some upside risk to its year-end forecast of $62 a barrel, as headwinds from U.S. producer hedging and higher recent freight rates fade.
“Nevertheless, absent growth or geopolitical tensions escalating into meaningful shocks, we expect that Brent oil prices are likely to continue trading in 2020 around our $60 (a barrel) forecast,” Goldman Sachs said in a research note published Tuesday.
“The ongoing OPEC cuts and slowing shale activity will offset rising other non-OPEC supply and moderate demand growth next year.”
Demand growth concerns
Brent crude traded at around $59.24 a barrel on Wednesday morning, down around 0.75%, while U.S. West Texas Intermediate (WTI) stood at around $53.96, down almost 1%.
In July, OPEC, alongside allied non-OPEC members, agreed to extend a 1.2 million barrel a day production cut for nine months.
Ahead of a meeting in early December, the Middle East-dominated group is considering whether to deepen production cuts amid concerns of weak demand growth next year.
Goldman Sachs lowered its oil demand growth forecast to 950,000 barrels per day (b/d) in 2019, down from a previous forecast of 1.25 million bpd.
It also reduced its forecast for demand growth in 2020 to 1.25 million b/d, down from 1.45 million b/d.