Will oil prices keep falling? Analysts are betting on a rise

Despite a sharp drop in oil prices during the first months of this year, analysts and investment bankers believe prices could rise significantly again, as reported by the international portal Oilprice. Goldman Sachs forecasts that oil prices will reach 95 USD/bbl by the end of the year and average above 100 USD/bbl in 2024. It says macroeconomic developments and current negative sentiment are overshadowing market fundamentals, which it sees as supportive of growth.

The price of Brent crude is currently at a 15-month low, trading at around 76.3 USD/bbl. As the chart below shows, the front-month price was above 120 USD/bbl in June last year.

Since then, however, concerns that oil demand could fall because of the threat of a severe economic recession in the US or EU have pushed prices significantly lower. Fears of a severe recession were also fuelled by the recent collapse of several US banks and problems at Switzerland’s Credit Suisse. These issues raised doubts about the state of the entire banking sector, both in the US and in the EU.