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Oil prices renewed their declines on Monday, dropping below $49 a barrel

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Article by Ron Bousso published 12 Jan 2015 by Reuters under the headline:

“Oil prices extend falls; Goldman Sachs slashes forecasts”

LONDON (Reuters) – Oil prices renewed their declines on Monday, dropping below $49 a barrel as Goldman Sachs slashed its short-term forecasts and Gulf producers showed no signs of cutting production.

Both Brent and U.S. crude are around their lowest since April 2009 and have fallen for seven straight weeks on a growing supply glut.

The February Brent contract (LCOc1) was down $1.29 at $48.82 a barrel at 0417 ET. U.S. crude oil for February (CLc1) was down $1.12 at $47.24 per barrel.

FULL ARTICLE

From an article by Chou Hui Hong published 12 Jan 2015 by Bloomberg under the headline: 

“Goldman Sees Need for $40 Oil as OPEC Cut Forecast Abandoned”

Goldman Sachs said U.S. oil prices need to trade near $40 a barrel in the first half of this year to curb shale investments as it gave up on OPEC cutting output to balance the market.

The bank reduced its forecasts for global benchmark crude prices, predicting inventories will increase over the first half of this year, according to an e-mailed report. Excess storage and tanker capacity suggests the market can run a surplus far longer than it has in the past, said Goldman analysts including Jeffrey Currie in New York.

The U.S. is pumping oil at the fastest pace in more than three decades, helped by a shale boom that’s unlocked supplies from formations including the Eagle Ford in Texas and the Bakken in North Dakota. Prices slumped almost 50 percent last year as the Organization of Petroleum Exporting Countries resisted output cuts even amid a global surplus that Qatar estimates at 2 million barrels a day.

“The search for a new equilibrium in oil markets continues.”

West Texas Intermediate, the U.S. marker crude, will trade at $41 a barrel and global benchmark Brent at $42 in three months, the bank said. It had previously forecast WTI at $70 and Brent at $80 for the first quarter.

FULL ARTICLE

From an article by Francisco Monaldi published on 12 Jan 2015 by The Guardian 

“Here’s what happens when oil prices crash – and it’s not pretty for producers”

The longest and biggest oil boom in history is over. The current price collapse – for the first time since 2009 prices are below the symbolic $50 a barrel – is largely a result of the boom in shale oil production in the US, adding more than 3m barrels over the past few years.

FULL ARTICLE

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