Goldman Sachs sees OPEC+ raising oil output by 0.41 mb/d in August

Goldman Sachs anticipates OPEC+ will implement a final 0.41 mb/d production increase in August, citing tight spot oil fundamentals, resilient global activity data, and seasonal summer demand. The bank expects OPEC+ to then maintain flat production from September due to slowing global growth and new non-OPEC projects. Goldman maintained its cautious oil price forecast, projecting Brent crude to average $60/bbl and WTI $56/bbl for the remainder of 2025, and $56/bbl and $52/bbl respectively in 2026, reflecting expected supply growth outside of U.S. shale.

Analysis

Goldman Sachs anticipates OPEC+ will implement a final production increase of 0.41 million barrels per day (mb/d) in August, attributing this to tight spot oil fundamentals, resilient global economic activity, and seasonal summer demand. This follows a similar 0.411 mb/d increase for July, which was in line with market expectations and led to an oil price rebound of over $1 per barrel. The bank's outlook suggests OPEC+ will then maintain flat production levels from September onwards, citing anticipated slowing global growth in the third quarter and the ramp-up of new large-scale non-OPEC projects. Despite these near-term supply increases, Goldman Sachs maintains a cautious oil price forecast, projecting Brent crude to average $60 per barrel and West Texas Intermediate (WTI) at $56 per barrel for the remainder of 2025, with these figures decreasing to $56 for Brent and $52 for WTI in 2026. This cautious stance is predicated on expected substantial supply growth outside of U.S. shale, which is forecast to generate surpluses of 1 mbpd in 2025 and 1.5 mbpd in 2026. The bank notes that its oil price forecast remains unchanged as a moderate upgrade to demand—stemming from revised IEA Africa estimates, stronger European demand data, and a softer EV outlook in Western markets—offsets the impact of increased OPEC+ supply. OPEC+'s broader strategy, according to Goldman Sachs, is aimed at regaining market share, normalizing spare capacity, and exerting discipline on U.S. shale production.

Key Decisions for Investors

• Investors should consider the potential for near-term oil price support driven by OPEC+'s expected August production increase and seasonal demand, while factoring in Goldman Sachs' longer-term bearish outlook due to projected oversupply from 2025.
• It is advisable to closely monitor OPEC+ production decisions from September, as Goldman Sachs anticipates a shift to flat output, and track the commissioning of new non-OPEC projects, which are pivotal to the forecasted supply surpluses.
• Re-evaluate long-term crude oil price assumptions based on Goldman Sachs' cautious forecasts, with Brent projected at $60/bbl and WTI at $56/bbl for the remainder of 2025, potentially limiting upside for energy sector investments beyond these levels.