Growing oil demand and extended supply cuts have pushed the market into a deficit and will allow OPEC to sustain Brent crude prices in a range between $80 and $105 per barrel next year, Goldman Sachs said in a note on Wednesday.
The Wall Street investment bank also raised its year-ahead Brent forecast to $100 a barrel from $93 earlier, citing modestly sharper inventory draws.
"The key reason is that significantly lower OPEC supply and higher demand more than offset significantly higher U.S. supply," Goldman analysts wrote.
Saudi Arabia and Russia on Sept. 5 extended voluntary supply cuts of a combined 1.3 million barrels per day (bpd) to the end of the year, which the International Energy Agency said will result in a substantial market deficit through the fourth quarter.
Goldman said it assumed that Saudi Arabia would gradually unwind its voluntary output cut of 1 million bpd starting in the second quarter of 2024, but expected the 1.7 million bpd cut agreed with eight other OPEC+ members to hold throughout next year.
Global benchmark Brent crude futures were trading around $93 a barrel, having climbed more than 30% from June to a 10-month high at $95.96 on Tuesday.
Goldman said, though, that "most of the rally is behind us," and that Brent was unlikely to hold above $105 in a sustained manner next year, with high spare capacity and growing offshore projects capping long-dated oil prices.
It does not see Brent stabilizing below $80 per barrel next year either, when global oil demand led by Asia expected to grow by 1.8 million bpd with an economic soft landing still in sights despite the oil rally.
Meanwhile, British bank Barclays on Thursday noted a $3 upside potential to its fourth-quarter Brent forecast of $92 per barrel, citing rebounding demand in China and Saudi Arabia holding production flat through year-end.
(Reporting by Deep Vakil and Anjana Anil in Bengaluru Editing by Tomasz Janowski)