Goldman Sachs economists forecast oil prices will soar to $140 a barrel this summer, with a drop in Russian production and a gradual recovery in Chinese demand adding to the pressure on already low supplies.

However, they said that consumers will feel as though oil has hit $160 a barrel, because a lack of capacity at refineries means gasoline and fuel prices are rising more than would normally be expected, adding to costs across the economy.

Oil pricessoared  50% this year as a result of Russia's invasion of Ukraine and broader supply and demand imbalances. High oil prices have pushed US gas prices to a record high of $4.92 a gallon, according to the AAA.

Brent crude, the international benchmark, and WTI crude, the US benchmark, traded at around $119 and $118 a barrel respectively Tuesday.

Goldman's analysts, including chief commodities strategist Jeff Currie, said in a note Monday that they expected prices to go higher "given the current record low levels of inventories."

They predicted Brent will average roughly $140 a barrel in the third quarter of the year, but said it could go higher.

"A large spike in prices remains quite possible this summer, when demand seasonally reaches its peak," the analysts wrote.

Nonetheless, Currie and colleagues said consumers would feel an amplified pressure, as though oil had jumped by even more. The analysts said there was "an unprecedented refining shortage."

Goldman's team argued that a rise in Brent crude to $140 a barrel means that prices across developed economies reaching levels normally associated with $160 a barrel this summer.

The investment bank said it expects prices to stay high, even though a surge to around $140 would trigger some "demand destruction" by encouraging people to stop using as much energy.

Goldman said Brent oil prices would average $115 a barrel in the fourth quarter of 2023, with WTI averaging $110.