Analysts at Goldman Sachs have reduced their oil price forecasts amid warnings that oversupply could push prices down to near $20 a barrel.
The Financial Times reports Goldman Sachs has cut its forecasts for WTI crude oil from an estimate of $45 per barrel in one month to $38 per barrel. It has also reduced its six-month forecast from $54 to $40, and its 12-month forecast from $60 to $45.
Analysts says: “The oil market is even more oversupplied than we had expected and we now forecast this surplus to persist in 2016 on further Opec production growth, resilient non-OPEC supply and slowing demand growth, with risks skewed to even weaker demand given China’s slowdown and its negative emerging markets feedback loop.
“While not our base case, the potential for oil prices to fall to such levels, which we estimate near $20/bbl, is becoming greater as storage continues to fill.”
Brent oil is currently trading at around $48.13 per barrel, while WTI is trading at $45.12.
In May 2008 Goldman Sachs forecast that crude oil prices could surge to $200 a barrel within two years.