TOKYO: Brent crude plunged its value for third consecutive day, dropping towards $85 a barrel on Tuesday, still under pressure from a Goldman Sachs report that slashed the investment bank’s oil price forecasts.
Citing rising production and insufficient demand, Goldman Sachs on Sunday cut its forecast for Brent to $85 a barrel from $100 for the first quarter of 2015 and reduced its projection for US crude to $75 from $90.
Analysts from other major banks have also cut forecasts for 2014 and 2015 crude oil prices, citing global growth concerns, a strengthening dollar and ample supplies.
London Brent crude for December delivery was trading 44 cents lower at $85.39 a barrel by 0350 GMT, after dropping 30 cents by the close on Monday.
U.S. crude for December delivery was down 28 cents at $80.72 a barrel. The West Texas Intermediate futures hit $79.44 on Monday, the lowest level since June 2012.
U.S. oil may break support at $79.95 per barrel and fall further to $77.60, a Reuters market analyst, Wang Tao, said on Tuesday.
The meeting of the Organization of the Petroleum Exporting Countries (OPEC) next month in Vienna is shaping up to be one of the most important in years, with Brent having lost more than $30 from a mid-June peak on the supply-demand imbalance.
Some OPEC members, such as Saudi Arabia, Iran and Kuwait, have indicated the group was unlikely to cut output to bolster oil prices that slid to a near four-year low earlier this month. Although other members have said they would support cuts, little momentum has built up around the idea of cutting production targets for the first time since the 2008 financial crisis.
Despite disruption in producers such as Libya and Iraq, global oil supply remains high.
