Goldman sees oil at $110 a barrel in 2023 on OPEC+ production cuts


A worker posting an OPEC sign.
A worker attaches a poster of the Organization of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria, Wednesday, Nov. 29, 2017. With bills rising for gasoline or heating oil, consumers around the world are paying the price for a decision by OPEC and Russia last year to cut production. The strategy is working for those oil-producing nations and will likely be extended at a meeting Thursday. (AP Photo/Ronald Zak)

Goldman sees oil at $110 a barrel in 2023 on OPEC+ production cuts

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A top Goldman Sachs official said Tuesday there is a high likelihood that OPEC+ will order additional production cuts in December and that the bank expects oil prices to hit $110 per barrel next year due to recession fears, lower demand from China, and lack of clarity over the planned price cap on Russian oil.

Jeff Currie, the global head of commodities at Goldman Sachs, said this combination of factors is what prompted the bank to downgrade its recent oil price forecast, including a $10 reduction to its fourth quarter forecasts last week.


“Demand is probably heading south again in China” as it battles with a resurgence of COVID-19 cases expected to delay its economic reopening, Currie told CNBC’s Steve Sedgwick at the bank’s Carbonomics conference.

An extended reduction in Chinese oil demand would have a big impact on global markets. Demand from China is “worth more than the OPEC cut for the month of November,” Currie said.

His remarks come as a growing wave of unrest erupted in China this weekend over the country’s “zero COVID” policies. Analysts fear a resurgence of cases could blunt demand from the world’s largest crude importer heading into 2023.

Concerns also remain over the G-7 Russian oil price cap slated to take effect in just six days. Russia “is just pushing barrels on the market right now before that Dec. 5 deadline for the export ban,” Currie said.

Leaders have not announced the capped price due to deep divisions in the European Union — and the lack of consensus has sparked fear that the cap may not cut into Russia’s war revenue the way leaders had intended.

OPEC+ leaders will gather in Vienna on Sunday for their next meeting, and leaders have not ruled out the possibility of ordering further production cuts — even after they agreed last month to slash the cartel’s output target by 2 million barrels per day through 2023.

Looking ahead, Currie said the medium-term oil outlook in 2023 is “very positive.”

Goldman plans to “stick to our guns” with its predicted Brent crude price of $110 per barrel next year, he said.


Last week, the bank cut its oil price forecast by $10 to $100 per barrel for the fourth quarter of 2022.

“The market is right to be anxious about forward fundamentals, due to significant Covid cases in China and a lack of clarity on the implementation of the G7′s price cap,” Goldman analysts said in the note.

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