Oil extends losses over weak price outlook

LONDON: Oil moved lower on Tuesday after Goldman Sachs lowered its price forecasts for the next two years owing to a global supply glut.
US benchmark West Texas Intermediate (WTI) for delivery in December fell 24 cents to $80.76 a barrel.
Brent North Sea crude for December slid 47 cents to stand at $85.36 a barrel in London afternoon deals.
“We continue to see oil prices drift lower, and with nothing significant happening, the Goldman report is still on investors’ minds,” David Lennox, resource analyst at Fat Prophets, said.
Goldman said on Monday it expected 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 its previous forecast.
The Wall Street giant’s outlook on Brent is for it to fall to as low as $80 by the second quarter, staying weak through 2015 before returning to $90 level in 2016.
It pointed to the impact of strong US shale oil output as well as the inability of the OPEC oil group to act as a swing producer.
Given the rising glut on the global market, “US production growth needs to slow,” Goldman said in a client note.
Lennox said investors will be monitoring the latest US stockpiles report due on Wednesday.
The US Department of Energy (DoE) last week reported a 7.1-million barrel surge in crude reserves in the week to October 17.
The surge, more than double market expectations, added to worries about a global oversupply, further dampening prices.
“Further increases in US stockpiles will reinforce the weak price forecast by Goldman and others,” Lennox said.