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Crude prices could fall to production cost levels if glut worsens: Goldman
[LONDON] Goldman Sachs on Monday said crude oil prices could fall to production cost levels if the current supply glut stretches beyond available logistical and storage capacity.
"Fundamentals remain weak and we view the market to be strongly oversupplied," the bank said in a note, reiterating its three-, six- and 12-month WTI price forecasts of $42, $40 and $45 per barrel, respectively.
Goldman also kept its three-, six- and 12-month Brent price forecasts at $47, $45 and $49 per barrel, respectively.
The bank forecast oil demand growth at 1.62 million barrels per day (bpd) in 2015, and 1.28 million bpd next year.
A recent rally in oil prices would probably reverse as it had little fundamental support, the bank said last week, reiterating its expectation that prices will likely remain"lower for longer".
The bank said its "broad, bearish view" remains unchanged in terms of the overall commodities complex.