Brent crude oil prices will likely continue trading around current levels in 2020, Goldman Sachs said on Wednesday, with slowing economic growth and geopolitical concerns failing to create large waves in the market.
Brent oil prices are expected to continue trading around the investment bank's $60 per barrel forecast in 2020, it said in a research note on Tuesday.
"Ongoing OPEC cuts and slowing shale activity will offset rising other non-OPEC supply and moderate demand growth next year," the note said.
However, the bank predicts some upside risk to year-end Brent forecast of $62 a barrel as headwinds from US producer hedging and higher recent freight rates fade and tighter supply and demand fundamentals and lower stockpiles in emerging markets drive the market.
The bank estimated that the global oil market was in a supply deficit of 1.3 million barrels per day (bpd) during the third quarter because of the voluntary cuts by Saudi Arabia and the loss of Iranian and Venezuelan supply to the market because of US sanctions.
Oil prices fell on Wednesday as US industry data showed a bigger-than-expected build in crude stockpiles, but the possibility of deeper output cuts from Organization of the Petroleum Exporting Countries (OPEC) and its allies contained the decline.
Brent crude futures were trading at $59.43 a barrel, down 0.5 percent, as of 0554 GMT.
Goldman Sachs also lowered its oil demand growth forecast to 950,000 bpd in 2019 from 1.25 million bpd and in 2020 to 1.25 million bpd from 1.45 million bpd previously.
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