Summary The oil market sank Friday as Goldman Sachs slashed its price forecasts for next year.
NEW YORK (AFP) - The oil market sank Friday as Goldman Sachs slashed its price forecasts for next year in the face of a larger glut than it originally expected.
US benchmark West Texas Intermediate (WTI) for October fell $1.29 to $44.63 a barrel on the New York Mercantile Exchange, after having added almost $2 on Thursday.
Brent North Sea crude for delivery in October, the global benchmark for oil, closed at $48.14 a barrel in London, down 75 cents from Thursday s settlement.
Since last Friday, both contracts have lost about three percent.
"There s still a lot of indecision here. We ve been back and forth, and we re trying to find a fair value," said Carl Larry at Frost & Sullivan.
"For every report that comes out, every prediction that comes, we re still not out of this range, between $40 and $50."
"Right now, what matters is supply, as the demand picture hasn t changed," he added.
Goldman Sachs cut its 2016 price forecast for WTI to $45 a barrel, sharply lower than its May estimate of $57.
"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," it said.
In the worst case, the US bank projected the price of oil could tumble to near $20 a barrel if the glut breaches logistical and storage capacity.
On the other hand, the International Energy Agency forecast that oil supplies outside OPEC would fall by half a million barrels per day next year, with US shale producers accounting for four-fifths of the decline.
Supporting that view, the Baker Hughes US oil rig continued its downward trend Friday. The rig count, a closely watched gauge of drilling activity, fell by 10 to 652, down 59 percent from a year ago.
