Summary Oil prices headed lower on Monday as Goldman Sachs sliced its price forecast for crude.
NEW YORK (AFP) - Oil prices headed lower on Monday as Goldman Sachs sliced its price forecast for crude amid mounting stockpiles around the globe.
Brent North Sea crude for delivery in December lost 30 cents to stand at $85.83 in London trade. In New York, the US benchmark West Texas Intermediate for December gave up one cent at $81.00 a barrel.
Analysts at Goldman delivered a highly bearish forecast for prices, saying it expects WTI to sink to $70 a barrel by the second quarter of next year before rising back to $80 in 2016. That was $15 a barrel lower than the previous forecast.
The bank s outlook for Brent is the same, falling to as low as $80 by the second quarter, and remaining weak through 2015 before returning to the $90 level in 2016.
Goldman pointed to the increasing impact of non-OPEC production growth outside North America, of strong US output, and the inability of OPEC to act any longer as the swing producer which could tighten global supplies and prices.
"US shale oil output will be called upon to fill this role," Goldman said in a client note. Given the rising glut on the global market, "US production growth needs to slow."
Analysts at Barclays underscored the rise in stockpiles of crude and products not only in the United States but elsewhere.
"This year, global commercial oil stocks have surpassed the 5.0 billion barrel mark, growing at a rate of 1.16 million barrels per day on average over the first three quarters of this year," the British bank said.
"Such is the surplus in the market that is weighing on prices."
"The absence of an official policy statement, especially from Saudi Arabia in response to the fall in oil prices, has left a void in guidance," it added.
