With OPEC+ determined to ramp up production despite tepid demand and US President Donald Trump's administration resuming nuclear talks with Iran carrying the possibility of a settlement - a bit of a mad scramble to lower oil price forecasts is taking place.
Banks and brokerages are all lining up to lower their prior forecasts. Last week, Goldman Sachs told clients it now expects Brent crude to average $60 per barrel for the remainder of 2025 and around $56 in 2026. Both projections are lower by $2 from their previous level. Goldman Sachs also cut its forecast for WTI crude by $3 per barrel to an average of $56 for the rest of 2025 and $52 in 2026.
It is by no means alone. Morgan Stanley has also trimmed its oil price forecasts for the remainder of the year. It revised its Brent projection down to $62.50 per barrel in the third and fourth quarters of 2025; a downward revision of $5 per barrel from the previous forecast.
Meanwhile, Barclays has cut its Brent forecast by $4 to $66 per barrel for 2025 and by $2 to $60 a barrel for 2026. ING cut its Brent forecast too for the remainder of 2025 down to $62 per barrel from $68.
Citi also cut its three-month price forecast for Brent down to $55 per barrel on Thursday, from a previous estimate of $60 per barrel. It has however maintained the $60 projection for its long-term forecast. And ANZ maintained its already low oil price target over the next three months of $55 per barrel but warned of risks "firmly skewed to the downside."
Away from banks and brokerages, the US Energy Information Administration - statistical arm of the Department of Energy - cut its average Brent oil spot price forecast for 2025 and 2026 in its latest short-term energy outlook published on May 6.
The EIA currently sees the Brent spot price averaging $65.85 per barrel in 2025 and $59.24 per barrel in 2026. In its previous outlook published in April, it projected the Brent spot price to average $67.87 in 2025 and $61.48 in 2026.
Expect more downward revisions over the coming weeks unless mildly bullish sentiment returns via a combination of one or more of three developments: (1) US-Iran tensions revert to pre-talks level, (2) OPEC+ reverses course, and/or (3) an easing of US-China trade tiffs unfolds.
Even in that eventuality, the uptick is likely to pull Brent up to around the $70 mark in the Oilholic's opinion, and well shy of the $80+ levels the bulls crave. Well that's all for now folks, more musings to follow over the course of the month. Keep reading, keep it here, keep it 'crude'!
