Goldman Sachs Lowers Oil Price Forecast, Says $20 Per Barrel is Possible

CBC News reported that Goldman Sachs has downgraded its oil price forecast, expecting the price to average $45 per barrel, but said the price of crude oil could fall to $20 per barrel.
As quoted in the market news:

The investment bank downgraded its oil forecast on Friday, saying the oil glut is proving to be far worse than forecast and shows no sign of fixing itself in the short or medium term.
“The oil market is even more oversupplied than we had expected and we now forecast this surplus to persist in 2016,” the analysts wrote in a note to clients on Friday.
The bank now assumes that a barrel of West Texas Intermediate, the dominant North American oil blend, will average $45 through next year — down from $57 a barrel the last time the bank had a forecast.
But that’s just the scenario the bank thinks is most likely.
There’s an outside chance the price could fall even lower because “while not our base case, the potential for oil prices to fall to such levels, which we estimate near $20 a barrel, is becoming greater as storage continues to fill,” the bank said.
Goldman Sachs listed several reasons for their pessimism. It thinks OPEC isn’t as willing as some people believe to turn off the taps until prices rebound. Instead, OPEC seems to be increasing production, trying to rake in as much revenue as possible even if it means they are making less money for every barrel.

Click here to read the full CBC News report.