Oil could plunge more than 50 percent amid the global oil surplus and slowing demand, says Goldman Sachs. That sent crude prices lower. Fred Katayama reports.
Oil could plunge much lower and stay low. Goldman Sachs says U.S. crude could drop to as low as $20 a barrel - a fall of more than 50 percent from today. The bank says the global oil surplus, slowing demand, and a shortage of storage space could drive oil to that level ... with the slowdown in China and emerging markets adding to that risk. It did not put a timetable on that forecast, but Goldman cut its 2016 outlook to $45 from $57. That prediction comes as OPEC shows no signs of cutting production. Saudi Arabia just dismissed the idea of holding an oil producer summit. Sources say it thinks members won't agree to take action that would defend prices. Goldman thinks U.S. oil producers will have to cut back production to rebalance the market, saying, "We now believe the market requires non-OPEC production to shift from our prior expectation of modest growth to large declines in 2016." All that sending U.S. crude down more than 2 percent early Friday morning. Oil has had a rocky ride, falling from over $100 in June of last year to under $45 in March before zooming to above $60 in May then falling below $40 in late August.