Brent Prices Lower After Goldman Sachs Trims Forecast
Brent crude oil lost momentum on Monday morning after reports that Goldman Sachs had trimmed its forecasts for crude oil prices.
The commodity traded at $86.15 at 8:00 GMT as worries about growing global oversupply continued to pressure prices.
Reuters reported that the analysts at Goldman Sachs see Brent crude prices remaining around $85, down from a previous forecast of $100. The firm also forecasted that WTI futures would fall lower, down to $75 per barrel rather than $90.
The figures are based mostly on the growing global supply glut, which Goldman expects to be at its largest in the second quarter of 2015, pushing WTI as low as $70 per barrel and Brent down to $80.
Though most are expecting to see oil prices continue to fall as the global economy struggles to regain its footing, the predictions from Goldman Sachs weighed on crude prices as they confirm that there is little hope of any sort of price recovery on the horizon.
Investors are also considering the Federal Reserve’s policy meeting, set to take place on Tuesday and Thursday of this week. The U.S. central bank is expected to finish tapering its quantitative easing program by removing its final $15-billion worth of asset purchases.
The end to the Fed’s easy money program is a negative for crude prices as it adds strength to the dollar, however most expect that the bank will maintain low interest rates for an extended period in order to keep markets from taking a sharp turn due to policy changes.
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