Prices could "grind higher going into year-end, with real potential upside going into the first half of next year," Jeff Currie, Goldman's global head of commodities research, told Bloomberg today.
The bank sees "very clear upside risks" to its forecast for the Brent benchmark to average $85/bbl in 2023.
February Brent crude (CO1:COM) closed the day +1.2% to $69.67/bbl after plunging as much as 4.6% earlier, while January WTI (CL1:COM) settled +1.4% at $66.50/bbl, as OPEC+ left the door open for potential adjustments if oil prices decline further.
U.S. shale producers will be cautious in their spending plans for 2022 because of recent low prices, while OPEC's spare capacity will be reduced more quickly than if the group had decided to pause on supply increases, Goldman says, adding that the also takes pressure off the Biden administration to cut a deal with Iran that would have added barrels next year.
In the short term, Goldman says the oil market needs more information on the COVID-19 omicron variant for oil prices to start recovering above $80.