Support The Moscow Times!

Oil Prices Keep Falling as Goldman Sachs Slashes Forecast

U.S. crude oil for February was trading at just above at $46 per barrel on Monday afternoon.

Global oil prices fell by over $2 a barrel on Monday as Goldman Sachs lowered its short-term forecasts, while refineries in Ohio and Pennsylvania were hit by fires over the weekend, curtailing demand for crude in the United States.

Both Brent and U.S. crude are at their lowest since April 2009 and have fallen for seven straight weeks.

Analysts at Goldman Sachs cut their average forecast for Brent in 2015 to $50.40 a barrel from $83.75. They lowered their forecast for U.S. crude to $47.15 a barrel from $73.75, saying it would need to stay near $40 for most of the first half of 2015 before it would hold up shale oil investments.

"To keep all capital sidelined and curtail investment in shale until the market has rebalanced, we believe prices need to stay lower for longer," the analysts said in a report.

U.S. crude oil for February was trading at just above at $46 per barrel on Monday afternoon. The February Brent contract fell to just under $48 a barrel.

New oil and gas well permits issued across the United States rose slightly in December after falling sharply in November due to the plunge in crude prices.

The drop in November had pointed to a potential slowdown in the shale oil and gas boom that brought the United States into competition with Saudi Arabia to be the second-largest crude producer behind Russia.

Refinery disruptions in Ohio and Pennsylvania threaten to add to a growing glut of crude by reducing demand from two sizable plants, including the largest on the U.S. East Coast.

Venezuela said in a statement on Sunday it had agreed with Saudi Arabia to work for a recovery in the oil market and oil prices "with state policies" from the two countries, without providing details.

However, Saudi Arabia, the world's biggest oil exporter, has said it won't support prices by cutting production and it ignored calls from smaller OPEC members, including Venezuela, to react to falling oil prices at a meeting of the cartel in November.

"Oil market fundamentals are gradually shifting in response to the sharp fall in prices, but are set to have an impact on market balances only by the latter half of 2015," analysts at Barclays said on Monday.

They expect the oil surplus to expand by 1 million barrels per day in the first quarter compared with the previous three months.

Sign up for our free weekly newsletter

Our weekly newsletter contains a hand-picked selection of news, features, analysis and more from The Moscow Times. You will receive it in your mailbox every Friday. Never miss the latest news from Russia. Preview
Subscribers agree to the Privacy Policy

A Message from The Moscow Times:

Dear readers,

We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."

These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.

We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.

By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more