Goldman Sachs flips on oil-price forecasts and says $120 Brent could be next.

Just three months after trimming its outlook, Goldman Sachs has reversed course, now flagging the potential for Brent crude to reach $120 per barrel. The revision reflects a rapidly tightening supply-demand balance, driven by a combination of geopolitical supply disruptions and resilient global consumption. For market participants, the shift is notable because it signals that the bank’s previous caution has been overtaken by physical market realities, where inventories are drawing down faster than anticipated.

The updated forecast carries broad market relevance. Energy prices are a key input for inflation expectations, and a sustained move toward $120 would likely reignite concerns about central bank policy tightening. Equities in transport, airlines, and consumer discretionary sectors could face margin pressure, while energy producers and related service companies may see renewed investor interest. Currency markets, particularly oil-sensitive pairs like the Canadian dollar and Norwegian krone, could also react to the trajectory.

What to watch now is whether the physical market confirms the projection. Key data points include weekly U.S. crude inventory reports, OPEC+ production decisions, and any shifts in Russian or Middle Eastern supply flows. If supply remains constrained and demand does not falter, the path toward triple-digit prices becomes more credible. If demand weakens, however, the forecast may again be revised down just as quickly.