Goldman just revised its oil price forecast. Here's what it could mean for ASX 200 energy shares in 2023

A range of factors influence how well ASX 200 energy shares will perform. The oil price is chief amongst them.

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S&P/ASX 200 Index (ASX: XJO) energy shares are underperforming the benchmark on Tuesday.

In afternoon trade, the ASX 200 is 0.14% in the green at the time of writing. It's being dragged down by some of the top energy stocks, with the S&P/ASX 200 Energy Index (ASX: XEJ)1.59% lower at this same time.

Here's how these ASX 200 oil and gas stocks are tracking:

  • Santos Ltd (ASX: STO) share price is down 2.2%
  • Beach Energy Ltd (ASX: BPT) share price is down 1.72%
  • Woodside Energy Group Ltd (ASX: WDS) share price is down 1.79%

The Brent crude oil price is technically up 0.5% overnight. But it's significantly lower than on Friday, the last time these ASX 200 energy shares were trading.

On Friday, a barrel of Brent crude was fetching US$75.96. Today that same barrel is trading for US$72.20.

What's next for these ASX 200 energy shares?

A number of factors will determine how these ASX 200 energy shares fare over the rest of 2023.

Outside of a range of company-specific metrics, the biggest thing to watch is the oil price.

Which brings us to Goldman Sachs.

The broker holds one of the more bullish outlooks on the oil price. But over the weekend, Goldman's analysts lowered their 2023 price forecasts for oil.

Despite OPEC's ongoing production cuts, and the latest pledge by Saudi Arabia to knock off an additional one million barrels per day in July, Goldman sees global supplies increasing relative to demand.

As Bloomberg reports, the broker cited resurgent production from Russia, despite sanctions over its war in Ukraine, as unexpectedly driving up global supplies. Goldman said Russia's oil output has "nearly fully recovered" to pre-war levels.

The analysts also said a potential global recession is likely to keep the lid on the oil price, saying higher interest rates may be a "persistent headwind" for crude oil and, by extension, ASX 200 energy shares.

With that in mind, Goldman has revised its forecast for the Brent crude oil price to US$86 per barrel in December, down from the previous forecast of US$95 per barrel.

Commenting on the oil markets and Goldman's downgrade, a senior energy trader at CIBC Private Wealth, Rebecca Babin, said:

Beyond the fact that a vocal crude bull cut their crude forecast again, physical market indicators also are shaking confidence of bulls expecting the market to shift from a surplus to a deficit in the coming months. Time spreads, which are the holy grail for traders assessing supply and demand dynamics, continue to deteriorate.

Bear in mind, though, that despite the downward revision, Goldman is still forecasting Brent will be trading more than 19% higher in December than it is today.

Which, if that proves true, should offer some welcome tailwinds for these ASX 200 energy shares.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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