Goldman Sachs predicts that 2026 will mark the final year of oil supply volatility, while the surge in liquefied natural gas (LNG) supply will persist until 2032, with both waves significantly suppressing global oil and gas prices.

In its latest 2025-2026 commodities outlook report, Goldman Sachs signals that a "supply wave" at the micro level will dominate energy price trends in the coming years. The bank forecasts a "last major supply wave" in 2026, leading to a daily surplus of 2 million barrels. Brent crude prices are expected to average $56 per barrel in 2026, bottoming out mid-year. Analysts note that unless large-scale supply disruptions occur or OPEC+ implements substantial production cuts, lower oil prices in 2026 will be an inevitable market rebalancing mechanism.

(Brent Crude Daily Price Chart)

Meanwhile, Goldman Sachs anticipates an unprecedented, prolonged supply glut in the natural gas market. Global LNG supply is projected to surge by over 50% between 2025 and 2030, exerting long-term downward pressure on European gas prices (TTF), which could decline by nearly 35% by mid-2027.

**Crude Oil: The Final "Supply Wave" and the 2026 Bottom** Goldman Sachs analysts, led by Daan Struyven, highlight that micro-level fundamentals—specifically, a massive supply wave starting in 2025—will be the primary driver of lower oil prices. Unlike the prolonged oversupply in natural gas, the oil glut will be relatively short-lived, concentrated in 2025-2026.

The bank attributes this to the simultaneous launch of long-cycle projects (mostly those with final investment decisions, or FIDs, made pre-pandemic) and OPEC's strategic decision to unwind production cuts. This will create a daily surplus of 2 million barrels in 2026.

This supply shock is expected to end in 2026, marking the "last major supply wave." As a result, Goldman Sachs forecasts further declines in average oil prices for 2026:

- Brent at $56 per barrel (significantly below the current forward market price of $59). - WTI at $52 per barrel (below the current forward market price of $56), roughly 8-10% lower than current futures prices.

Under Goldman's base scenario, oil prices are projected to bottom in mid-2026. The market will then begin anticipating rebalancing mechanisms, including low prices squeezing out non-OPEC supply (excluding Russia) and further reductions in Russian output.

After the mid-2026 trough, Goldman expects oil prices to rebound in Q4 2026 as the market prices in a supply shortfall in late 2027, shifting focus to incentivizing long-cycle production.

The report notes that to meet demand growth in the 2030s and 2040s and offset natural declines in aging fields, prices must rise to stimulate investment. Goldman projects Brent/WTI prices to gradually recover to $80/$76 by late 2028.

A key risk factor in Goldman's oil price forecast is Russia's production trajectory. A peace agreement in Ukraine could lead to a gradual recovery in Russian output, pushing the 2026 Brent average to $51 per barrel. Conversely, escalated attacks on Russian oil infrastructure or tighter sanctions could drive prices above baseline projections.

**Natural Gas: Unprecedented Global Supply Glut** Unlike the relatively short-lived oil supply shock, Goldman Sachs warns that the natural gas market is entering a seven-year (2025-2032) supply surge.

FIDs made in recent years will translate into capacity additions, particularly in the U.S. and Qatar. Global LNG export capacity is expected to grow by over 50% from 2025 to 2030—far outpacing demand growth and significantly pressuring global gas prices.

The U.S., as the primary driver of LNG supply growth, will see its export demand tighten domestic gas markets, pushing Henry Hub prices to $4.60 and $3.80 per million British thermal units (MMBtu) in 2026-2027 to incentivize sufficient production.

Meanwhile, the influx of LNG will crush European gas prices. Goldman forecasts a nearly 35% decline in TTF prices by mid-2027.

The report also outlines an extreme but plausible scenario: with global LNG supply growth persistently exceeding demand, Northwest European storage facilities could face "congestion" by 2028/2029.

To prevent inventory overflow, TTF prices would need to plummet below the variable export cost of U.S. LNG, rendering exports unprofitable and forcing cancellations. This could trigger a collapse in U.S. domestic gas prices.

Analysts project this dynamic could drive TTF prices down to €12 per megawatt-hour (~$4.10/MMBtu) and Henry Hub to $2.70/MMBtu in 2028-2029—both well below current futures prices.