Goldman Sachs has significantly tempered its outlook, cutting its Q2 2026 price forecast for Brent and US crude to $90 and $87 per barrel, respectively. This bearish projection contrasts sharply with the rebound seen in global oil benchmarks on Thursday. Oil prices regained momentum, surging over 2% as persistent concerns regarding disruptions in the Strait of Hormuz fueled immediate buying activity.
Global Benchmarks Rebound on Middle East Tension
On Thursday, crude oil futures demonstrated a strong upward swing. Brent crude futures climbed $1.96, or 2.07%, reaching $96.71 a barrel. Meanwhile, US West Texas Intermediate (WTI) crude advanced even more sharply, gaining $2.60, or 2.75%, to hit $97.01 a barrel.Domestically, the Indian market mirrored this bullish trend. Crude oil prices on the Multi Commodity Exchange (MCX) surged by as much as 2.62%, settling at ₹ 9,090 per barrel. These gains followed a period where Brent crude prices had dropped by over 11% throughout the week.
Geopolitical Instability Drives Price Volatility
The primary catalyst underpinning the Thursday rebound is the fragile nature of the two-week ceasefire agreement between the US and Iran. The uncertainty surrounding the stability of this ceasefire remains high, continuing to fuel fears of energy shipment disruption.Concerns were highlighted by the continuation of strikes by Israel on Lebanon the previous day. This prompted Iran to state that moving toward a lasting peace agreement negotiations would be "unreasonable." Shippers globally require greater clarity on the specific terms of the truce before restarting routine transit through the critical Strait of Hormuz.
Despite the ceasefire, regional energy infrastructure remains exposed. Reports indicated that Iran continues to target sites in neighboring countries, including a strike on a Saudi pipeline designed to bypass the blockaded Strait of Hormuz. Other nations like Kuwait, Bahrain, and the UAE also reported experiencing missile and drone strikes.
Analysts React to Forecast Cuts and Support Levels
Despite the market rally, Goldman Sachs issued a cautionary note regarding forward pricing. The bank lowered its second-quarter 2026 outlook to $90 for Brent and $87 for WTI, citing the observed reduction in the risk premium at the front of the curve and gradually improving oil flows through the SoH.The bank’s downgrade suggests a potential repricing of risk factored into future oil costs. Conversely, technical analysts suggest that underlying support remains robust. Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, noted that WTI appears well supported near $90.
Banerjee added that as long as the key question—the durability of the ceasefire—remains unanswered, prices are unlikely to fall below $90. The analyst identified $105-$110 as strong resistance levels, with $100 marking a crucial psychological benchmark for the commodity.
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