The investment bank Goldman Sachs has cut both the Brent and WTI oil price forecast by 2019, according to Bloomberg.
Brent is now seen averaging $62.50 per barrel in 2019 – down 10 percent from the previous price forecast of $70. Meanwhile, WTI price average for 2019 has been revised lower to $55.50 per barrel from $64.50.
Key points
Price levels and term structure remain undervalued relative to fundamentals.
The oil market will balance at a lower marginal cost in 2019, given higher inventory levels to start the year, the persistent beat in 2018 shale production growth amidst little-observed cost inflation, weaker than previously expected demand growth expectations (even at our above consensus forecasts) and increased low-cost production capacity.
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