Goldman Sachs predicts two years of recessionary crude prices
April 15, 2025
Exploration and production companies have already reacted to the lower crude prices as we saw yesterday with fracking crews down 10, dropping from 205 to 195. Several firms have said they will focus on drilled but uncompleted wells during this lower-price environment to conserve cash. Goldman Sachs is predicting recessionary crude oil prices for the next two years. Goldman forecasts his year will average $59 per barrel and $55 for next year. If prices stay where Goldman projects, US oil production could go backwards by over 1 million barrels per day, according to some estimates. If this takes place it would reverse any surplus global supplies and make it unlikely for crude to stay under $60 for the next two years. No one knows how this will play out, but we have already seen a decline in the number of rigs and frac crews, a sign that some changes are taking place.
The IEA is projecting a slowdown in global demand growth and US crude production. The IEA is cutting its 2025 growth in global crude oil demand by 300,00 bpd. It predicts growth at 730,000 bpd, down from 1.03 million bpd in its last forecast. The main reason for their adjustments the Trump Tariffs.
The US said they had positive talks with Iran concerning their nuclear programs over the weekend. All good for now but we will see how this progresses.
The Keystone oil pipeline is expected to resume service today following a leak that was discovered last week near Fort Ransom, North Dakota. The Keystone Pipeline System plays a key role in connecting Alberta’s crude oil supplies to US refining markets in the Midwest and down to the Gulf Coast refineries as well.