(Bloomberg) -- Goldman Sachs Group Inc., one of the most bullish banks on its outlook for oil, has nudged its forecasts down as worries over the banking sector and the potential for recession outweigh a surge in demand from China.

The bank’s analysts now see Brent reaching $94 a barrel for the 12 months ahead, and $97 a barrel in the second half of 2024, versus $100 a barrel previously.

“Oil prices have plunged despite the China demand boom given banking stress, recession fears, and an exodus of investor flows,” the bank said in a March 18 note. “Historically, after such scarring events, positioning and prices recover only gradually, especially long-dated prices.” 

Global markets have been roiled this week as turmoil at Credit Suisse Group AG triggered panic across markets. Oil has slumped to a 15-month low, with Brent dropping 12% this week to below $73 a barrel. 

Following the decline in prices, the bank now expects OPEC producers to only increase output in the third quarter of 2024, versus in the second half of 2023 which Goldman had estimated before the price rout.

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