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Oil Prices - The Rollercoaster

Write By: admin Published In: Industry News Created Date: 2015-09-11 Hits: 492 Comment: 0

Oil prices have been on a rollercoaster ride over the last year. 

Oil prices have been on a rollercoaster ride over the last year. West Texas Intermediate (WTI) oil tumbled late in 2014 from over $100 (£64.78) per barrel to just around $45 per barrel early this year. 

After a recovery back to around $60 per barrel during the early summer, prices have gone through the floor again, down to $45.12 again today.

But it could go even lower.

The price of a barrel of oil could go to just $20 soon, according to Goldman Sachs analysts led by global commodities research chief Jeffrey Currie.

There's a huge surplus of oil in the world, put down to both buoyant supply and weaker demand, and that could leave prices at levels not seen in decades. Here's a snippet from Goldman's latest note on oil:

The oil market is even more oversupplied than we had expected and we now forecast this surplus to persist in 2016 on further OPEC production growth, resilient non-OPEC supply and slowing demand growth, with risks skewed to even weaker demand given China’s slowdown and its negative EM feedback loop... While not our base case, the potential for oil prices to fall to such levels, which we estimate near $20/bbl, is becoming greater as storage continues to fill.

That's the level oil was at for most of the 1990s — though of course, $20 then was worth more than $20 now. 

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