Bloomberg.

SINGAPORE: U.S. oil prices will need to approach 40 barrels a barrel in the first half of this year as the U.S. abandons OPEC production cuts to balance the market Only the U.S. dollar will be needed to curb shale oil investment, Goldman Sachs said.

The bank cut its global benchmark crude forecasts on expectations that inventories will rise in the first half of this year, according to an emailed report.

Analysts such as Jeffrey Currie in New York (Jeffrey Currie) said Goldman Sachs said excess storage and tanker capacity suggests the market may be oversupplied for longer than in the past.

The U.S. is using 30 oil The fastest rate of oil output in years, thanks to a shale boom that has provided oil to the Eagle Ford and the Bakken in Texas. North Dakota. Qatar estimates global oil supply at 2 million barrels per day, but oil prices fell nearly 50% last year because the Organization of Petroleum Exporting Countries (OPEC) refused to cut production.

We believe prices need to stay low for a longer period of time before the market rebalances to dampen all capital and reduce investment in shale oil,” Goldman Sachs said in a report. Within three months, the bank said the U.S. benchmark crude, West Texas Intermediate, will trade at $41 a barrel and the global benchmark, Brent, will trade at $42 a barrel. Goldman Sachs expects first-quarter prices of $70 for WTI and $80 for Brent crude.

Reduced Forecast

Goldman Sachs announced that it is forecasting WTI oil prices to drop from $75 and $80 per barrel to $39 and $65 per barrel, and from $90 to $43 and $70 per barrel.

“We expect that in order to achieve a realistic rebalancing of the market, and in order to reduce capital and keep investments low enough, the expiry cost of WTI needs to remain below the marginal cost of $ 65 per barrel until next year, and close to $ 55 per barrel next year. The bank estimates that Goldman Sachs has enough capacity to store 1 million barrels a day of excess crude. U.S. refineries are expected to continue to oversupply as U.S. crude prices are discounted and “strong profit margins persist”. Across the Atlantic, the spread between West Texas Intermediate and Brent crude is set to widen further in the coming quarters. In 2016, the average spread between Brent crude and WTIII was $5 a barrel, according to the bank. Monday’s gap was $1.50.

OPEC production.

OPEC production

Goldman Sachs does not expect Saudi Arabia or other major OPEC members to announce production cuts, which are expected to help balance the oil market in the second half of this year in 2015.

“This is based on our expectation that a slowdown in U.S. shale oil production in the second half of 2015 alone would be enough to remove the threat of overcapacity in the market and quickly reallocate capital to restart U.S. production growth.

Baker Hughes announced on its website on Jan. 9 that it has 35 horizontal drilling rigs for hard-rock formations such as the Bakken Shale in North Dakota and the Permian Basin in Texas, and said they have been idle for the past week. It was the biggest one-week drop since the drilling boom began six years ago. A report posted on the state Department of Mineral Resources’ website on Jan. 8 said oil prices of $45 a barrel would cause North Dakota production to fall to 1.1 million barrels per day in early July. Some reports say production will continue in 2016, dropping to 1.05 million bpd by mid-year.

The Organization of the Petroleum Exporting Countries produces 40% of the world’s crude oil (OPEC) in the past six weeks, “curbing production has not prevented prices from plummeting.” 27 The Vienna meeting decided to keep the collective quota at 30,000,000 barrels per day.

Production averaged 30.24 million barrels a day in December, according to a Bloomberg survey. As of 9 London time, as of 9 London time. :50, Europe’s ICE Futures Exchange2 Brent crude oil prices fell 1.56 $ 48.55 per barrel U.S. dollars, or 3.1 percent. In electronic trading on the New York Mercantile Exchange, WTI fell 1.25 dollars to 47.11 dollars.