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Goldman Sachs trimmed its price expectation for Brent crude in 2024 by $10 per barrel to between $70 and $90, saying strong production from the United States would moderate any upside in oil prices.

“We still look for range-bound prices and only moderate price volatility in 2024. Elevated spare capacity to handle tightening shocks should limit upside price moves,” its analysts said in a note dated Sunday.

The investment bank now expects Brent to recover to a peak of $85 per barrel in June 2024, and to average at $81/$80 in 2024/2025 compared to $92 previously.

Brent was trading around $77 as of 0526 GMT on Monday, down 20% from multi-month highs hit in September.

US West Texas Intermediate crude was around $72 a barrel. Continued supply from non-Organization of the Petroleum Exporting Countries (OPEC) sources, led by the U.S, shows that several tailwinds to the US production are likely to persist in 2024, Goldman Sachs added.

Analysts said they expect US Lower 48 crude output to reach 11.4 million barrels per day (mb/d) in the fourth quarter of next year, and hiked US total liquids supply 2024 growth forecast to 0.9 mb/d from 0.5 mb/d earlier.

Goldman Sachs, J.P.Morgan cut UK’s 2023 growth forecast to 0.5%

However, OPEC decision to rein in supply, a recovery in China, restocking in the US and modest recession risk should limit downside risk to oil prices, the bank noted.

“Saudi Arabia is unlikely to ‘flush’ the market in 2024”, Goldman analysts said, adding “we expect full extensions of the OPEC+ cuts announced in April 2023 (1.7 mb/d) through 2025, and of the additional 2.2 mb/d package through 2024Q2.”

“We adjust our OPEC range trade to a short $70 put, long $80/90 call spread option on Brent Jun24, and still recommend long summer 2024 gasoline margins,” they added.

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