Crude drops as Goldman Sachs trims price forecast
Published Oct 27, 2014 01:12PM ET
Oil falls as Goldman Sachs cuts 2015 price forecast
Investing.com - Oil prices dropped on Monday after U.S. financial institution Goldman Sachs cut its 2015 price forecast.
In the New York Mercantile Exchange, West Texas Intermediate crude oil futures for delivery in December traded down 0.44% at $80.65 a barrel during U.S. trading, up from a session low of $79.46 a barrel and off a high of $81.26 a barrel.
The December contract settled down 1.32% at $81.01 a barrel on Friday.
Support for the commodity was seen at $79.10 a barrel, the low from Oct. 16, and resistance at $83.26 a barrel, last Tuesday's high.
Oil prices dropped though they came off earlier lows after Goldman Sachs cut its oil price forecast for WTI in the first quarter of next year by $15 to $75 a barrel.
The bank expects Brent prices to average $85 a barrel in the first three months of 2015, down from a previous estimate of $100.
Goldman analysts expect WTI to fall as low as $70 a barrel and Brent to $80 in the second quarter of 2015, when it expects oversupply to be most pronounced.
OPEC countries have hinted recently they may leave output quotes unchanged and have stressed the need to adapt to lower prices.
OPEC will hold its next meeting on Nov. 27.
Still, bottom fishing brought oil futures off earlier lows, as many investors have priced in long-term concerns that supply will outstrip demand going forward.
Prices have fallen about 20% in the last three months.
Lackluster U.S. data helped keep the commodity in negative territory as well.
The National Association of Realtors reported earlier its pending home sales index rose by 0.3% last month, disappointing expectations for a 0.5% gain. Pending home sales in August fell by 1%.
Year-on-year, pending home sales rose 1.0% in September, missing expectations for a 2.2% reading following a 4.1% decline in August.
Separately, on the ICE Futures Exchange in London, Brent oil futures for December delivery were down 0.71% at US$85.52 a barrel, while the spread between Brent and U.S. crude contracts stood at $4.87.
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Written By: Investing.com
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