Goldman Sachs (NYSE: GS) has revised its outlook for oil prices going into 2020, bringing their targets upward in the face of new news coming out of the Organization of the Petroleum Exporting Countries. This is coming off of analyst predictions that an alliance between OPEC and several countries that are not part of the organization is shaky and not likely to hold up over time. While these target increases are not big jumps over where they were before, they will give some wiggle room to energy providers in the United States that have been struggling to stay profitable in the face of lower oil prices. Along with these revised figures are new predictions of demand for crude oil. For the year 2019, Goldman Sachs predicts a demand for oil of 900,000 barrels a day and for the year 2020, that demand forecast is expected to increase to 1.2 million barrels a day. This is compared to the American Energy Institute's projections of a demand for 1.4 million barrels a day in 2020.
Goldman had a previous prediction that Brent Crude oil, which comes from the North Sea between the United Kingdom and Norway and makes up about two thirds of the pricing of international crude, would sit at around $60 a barrel in 2020. They have since revised that prediction upward to $63 a barrel. West Texas Intermediate (NYSE: WTI), the other major benchmark for global crude oil prices, has spiked from $55.50 a barrel to $58.50 a barrel. These predictions may be complicated by future tariffs on Brazil, one of the largest non-OPEC producers of oil. A restriction on imports of Brazilian oil, the production of which has increased in recent years, would put downward pressure on oil prices. This is not a major change for these targets, but they may provide some assistance to flagging energy companies such as Chesapeake Energy (NYSE: CHK), which once pioneered the shale oil boom but has fallen on hard times due to the low price of oil.