Goldman Sachs has lowered its forecast for U.S. crude oil prices as the investment bank sees the U.S. economy slowing and the risk of a recession rising due to President Donald Trump’s tariffs . Goldman on Sunday cut its December 2025 outlook for U.S. crude and global benchmark Brent to $58 and $62 per barrel, respectively. Prices are expected to fall further in 2026 with U.S. crude and Brent averaging $55 and $58 per barrel, according to the bank. “The risks to our reduced oil price forecast remain to the downside, because recession risk has grown further and because OPEC+ supply may rise more than we assume,” commodity analysts led by Daan Struyven told clients in a note. Goldman’s economists have cut economic growth forecasts for the U.S. in half to 0.5% from 1% previously. The bank now sees 45% probability of the economy contracting over the next 12 months, with its economists warning that they will change their forecast to a recession if Trump implements most of his tariffs on April 9. Oil prices have sold off steeply after Trump last week announced a 10% baseline tariff on imports and much higher levies on key trade partners such as China and the European Union. The decision by key members of OPEC+ to accelerate production increases has put further pressure on prices. Trump touted falling oil prices as a victory on Monday in the fight against inflation, but the steep decline may signal a recession and could undermine the administration’s goal to boost production in the U.S. Recession signal The front-month Brent futures contract declined 12.5% from Wednesday’s close through the end of Friday. A decline of that magnitude could be harbinger of an economic downturn, according to Martijn Rats, commodity strategist at Morgan Stanley. Brent has booked two-day declines of 12.5% or more only 24 times since the contract started trading in the summer of 1988 and 22 of those were during recessions, Rats told clients in a Monday note. Morgan Stanley now projects Brent falling to $62.50 per barrel by the third quarter, down from $67.50 previously. Bank of America sees oil demand growth this year falling by half due to Trump’s tariffs at the same that OPEC+ is pumping oil back into a fragile market. This could lead to an “eye-watering” surplus of 1.25 million barrels per day, according to the bank. “If this is the scenario that actually plays out, we believe oil prices and oil-levered equity values have more room to fall,” analysts led by Kalei Akamine told clients in a Monday notes. U.S. production could fall U.S. shale production could fall at current price levels. Producers on average need the West Texas Intermediate price to average $65 per barrel to profitably drill new wells, according to the most recent Dallas Fed Energy Survey. U.S. crude was trading below $61 per barrel on Monday morning. Goldman has already cut its U.S. shale supply forecast. The investment bank sees U.S. oil production in the continental 48 states falling from a peak of 11.4 million bpd in March 2025 to 11.3 million bpd by December of 2026. Goldman previously expected output to grow to 11.9 million bpd. “Buying protection against further downside to prices remains attractive for oil producers, and oil puts remain an attractive recession hedge for macro investors,” Struyven said. “We also continue to recommend that refiners hedge deferred refined product margins.” Oil executives were scathing in their criticism of Trump’s tariffs in anonymous responses to the Dallas Fed’s first-quarter survey. Several executives said they faced rising costs due to steel tariffs and will have to slash production if the White House succeeds in dramatically lowering oil prices. “The threat of $50 oil prices by the administration has caused our firm to reduce its 2025 and 2026 capital expenditures,” on executive said. “‘Drill, baby, drill’ does not work with $50 per barrel oil. Rigs will get dropped, employment in the oil industry will decrease, and U.S. oil production will decline as it did during COVID-19.” While Wall Street generally sees risk to the downside, consulting firm Rystad Energy expects “the recent price slide to be short-lived, cushioned by anticipated summer demand and ongoing geopolitical risks,” said Mukesh Sahdev, the group’s global head of commodity markets, in a Friday note. “With potential supply disruptions stemming from sanctions and tariffs—on both sellers and buyers—oil prices are unlikely to stay below $70 for long,” Sahdev said. 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