Goldman Sachs bets on OPEC+ to increase production in September, the downward trend of oil prices trapped in "oversupply" is difficult to stop.

Wall Street giant Goldman Sachs released its latest research report, stating that it is expected that the "OPEC+" group consisting of the eight largest oil producing countries will significantly increase their oil production quota by 550,000 barrels per day in September this year, reversing the comprehensive production cuts of 2.2 million barrels per day that were voluntarily made earlier. Against the background of resilient global oil demand, major oil-producing countries in the Middle East are seeking to restore idle production capacity to normal levels and reclaim market share that has been occupied by US shale oil producers in recent years due to production cuts. However, Goldman Sachs predicts that the significant increase in production by OPEC+ may strengthen the expectation of oversupply in the oil market, leading to a continued downward trajectory in international oil benchmarks, especially Brent crude futures prices. This oil production forecast released on Sunday follows the OPEC+ meeting on Saturday. At this energy policy meeting, the OPEC+ led by Saudi Arabia and Russia agreed to increase production by 548,000 barrels per day in August, further accelerating the pace of production increases in Middle Eastern oil-producing countries. This was the first meeting held by the organization since the spike in oil prices followed by a fall due to Israeli and US attacks on Iran. Goldman Sachs stated in their research report: "The early announcement of production increases on Saturday increases our confidence that the new phase we have been signaling since last summer, which leans more towards a long-term equilibrium strategy: centered around restoring idle production capacity and market share to normal levels, maintaining internal cohesion, and strategically restraining US shale oil supply." The team of analysts at Goldman Sachs forecasts that the overall oil production of OPEC+ (the organization of oil-producing countries and its allies led by Russia) from these eight core member countries, including crude oil and refined petroleum products, will increase by 1.67 million barrels per day between March and September, reaching a total of 33.2 million barrels per day. Among these countries, Saudi Arabia is expected to contribute over 60% of the production increase, aiming to regain more market share compared to US shale oil producers in recent years. The eight core countries of OPEC+ include Saudi Arabia, Russia, the United Arab Emirates, Kuwait, Oman, Iraq, Kazakhstan, and Algeria. Goldman Sachs maintains its bearish long-term outlook on Brent crude prices: it is expected to average around $59 per barrel by the fourth quarter of 2025, and about $56 per barrel in 2026. The core logic for the bearish outlook lies in the continued fermentation of oversupply expectations brought about by a significant increase in supply and negative offset factors such as a reduction in idle production capacity that supports long-term oil prices. Goldman Sachs also pointed out that oil demand faces some upward risks, predicting a global increase in oil consumption of 600,000 barrels per day by 2025, and an increase of 1 million barrels per day by 2026, driven by strong demand from Petrochina, resilient global economic activity, and further depreciation of the US dollar. Goldman Sachs believes that while there is generally balanced risk in oil price forecasts for 2025, there is significant downside risk for 2026: first, OPEC+ may completely cover the scale of the second round of post-pandemic production cuts of 1.65 million barrels per day; second, the probability of a US economic recession remains high, with Goldman economists estimating the probability of a US economic recession to be around 30%, which is still relatively high. On Monday, Brent crude futures prices fell by over 1% to $67 per barrel, continuing the decline following expectations of accelerated production increases from OPEC+. OPEC+ agreed to raise production by 548,000 barrels per day in August, higher than the market's expected monthly increase of 411,000 barrels per day. This move will see the eight super oil-producing countries, constituting OPEC+, return nearly 80% of the 2.2 million barrels per day voluntary production cuts to the market. The latest forecast from the International Energy Agency, headquartered in Paris, indicates that, due to the possibility of a substantial increase in production by OPEC+ to boost market share, the oil market will see a "significant oversupply" later this year. Wall Street investment institutions such as Morgan Stanley, JPMorgan Chase, and Goldman Sachs widely predict that international crude oil prices will fall to $60 per barrel or lower in the fourth quarter. These three institutions all forecast a significant "oversupply" in the oil market in 2025 and 2026, which will continue to drive international oil prices downward until 2026. Another Wall Street giant, JPMorgan Chase, stated that they continue to be bullish on gold and maintain a bearish trading strategy for crude oil and base metal commodities. In addition, the new round of trade wars initiated by US President Trump could also impact the global economy, bringing unprecedented uncertainty to demand prospects.