Goldman Sachs on Tuesday cut its 2023 oil price forecast due to expectations of weaker demand and a stronger U.S. dollar, but said the ongoing global supply disappointments only reinforced its long-term bullish outlook.
Goldman's commodities research division lowered the forecast for next year by $17.5 per barrel on average, even as it saw a seasonally adjusted global oil market deficit in the fourth quarter of 2022 and in 2023.
The short-term path for oil prices is likely to remain volatile, Goldman said, adding that a sharply appreciating dollar and lower demand expectations will continue to put downward pressure on oil for the rest of this year. It would take an economic hard landing and a contraction in global GDP growth to justify sustained lower prices, the note said.