Goldman Sachs forecasts that artificial intelligence (AI) could significantly lower oil prices over the next decade by enhancing supply and reducing operational costs.

Despite the anticipated rise in power demand due to AI, experts argue that the increase in oil supply will likely surpass this demand.

While AI will elevate overall power consumption, it is not expected to significantly impact oil demand, as oil is not a primary energy source for power generation.

Current market trends show a decline in oil prices, with Brent crude futures recently dropping to $74.02 per barrel, the lowest since December.

U.S. oil futures have seen a significant drop, reflecting broader market concerns and contributing to a bearish sentiment.

Investor reactions to OPEC data reveal that eight OPEC+ members plan to increase production by 180,000 barrels per day, raising fears of oversupply amid weakening demand.

AI applications in the oil and gas sector are diverse, including locating exploration sites, subsurface engineering, reservoir modeling, and optimizing drilling extraction rates.

Analysts believe that AI will improve logistics and productivity, leading to a substantial increase in oil supply in the coming years.

The expected supply gains from AI are projected to greatly exceed any potential increase in oil demand, further pressuring prices.

A decline in oil prices could negatively impact the incomes of oil producers, particularly those within OPEC+.

Despite the benefits of AI, the surge in power consumption from tech companies focusing on AI is creating competition for power resources, notably with industries like Bitcoin mining.

The bank's analysis suggests that AI could increase recoverable resources, potentially boosting US shale oil reserves by 8% to 20%, which translates to an additional 30 billion barrels.