- Crude oil prices little changed on Monday morning.
- Goldman Sachs raises 2015 price outlook for Brent, WTI, but lowers long-term forecast.
- Global oil demand will be met by US shale and OPEC production for years to come, Goldman says.
Goldman Sachs raised its yearly outlook on crude prices, but cautioned investors about an oversupplied market in years to come, suggesting oil prices are likely to remain at the lower end of the spectrum over the long haul.
The US investment bank raised its projection for Brent crude to $58 a barrel this year from $52 and said US crude futures would average $52 a barrel as opposed to $48. The rosier outlook is an extension of the large upswing in oil prices over the past two months, as a stabilizing international market helped to lift crude prices from more than six-year lows.
However, Goldman Sachs also warned investors that oil prices will likely fall over time, as ample global supply from the United States and OPEC will more than offset future demand.
“We lower our Brent oil price assumption to $60-$65 for 2016-2019, falling to $44 for 2020,” Goldman said in a report published over the weekend. “We see global oil demand being met by US shale, which is continuing to benefit from efficiency and productivity improvements, and OPEC.”
Brent was steady on the New York Mercantile Exchange, trading at $66.17 a barrel.
US benchmark West Texas Intermediate (WTI) for June delivery continued to hover below $60.
Last week the Energy Information Administration (EIA) said US oil inventories declined for a second consecutive week, but remained very high at 485 million barrels. Oil inventories remain around 20 percent higher than they were at the same time last year.