The price of oil could tumble even further to a low of $20 (17.73 euros) a barrel – that’s the warning from Goldman Sachs in a report published on Friday.
It blames the global oversupply which it says is even worse than had been expected.
The investment bankers say they expect the surplus to continue next year.
Over the past two months crude oil has plunged from around $60 (53.2 euros) a barrel to below $40 (35.4 euros) at one point.
Goldman analysts believe prices will need to stay lower for longer to force production cuts.
GOLDMAN SACHS: Huge supply and weak demand could send oil prices plunging to $20 per barrel http://t.co/mlkfTlG282— BI Markets (@themoneygame) September 11, 2015
Oil prices have more than halved since summer last year – the result of a global glut as well as the decision by OPEC countries, led by Saudi Arabia, not to cut output but to fight for market share.
That move which shocked markets has prompted the International Energy Agency to forecast that non-OPEC countries including the United States will be forced to cut production by the steepest rate for more than two decades to re-balance the market.
In 1992 non-OPEC supply contracted by a million barrels a day from the previous year, with the collapse of the former Soviet Union.
The IEA forecasts that production outside OPEC countries will fall by 500,000 barrels a day next year.
It says the price collapse is closing down high-cost production from Texas to Russia to the North Sea.
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