Goldman Sachs cuts oil prices forecasts

Goldman Sachs has cut its forecast on oil prices for 2016 to 2020, on the back of improved US shale efficiency and unrestricted OPEC productivity.

However, in a note published on 16 May, the US investment bank lifted its average price for 2015 Brent crude to $58 barrel from $52 and raised its forecast on the average price of West Texas Intermediate from $48 to $52 a barrel.

"We see global oil demand being met by US shale, which is continuing to benefit from efficiency and productivity improvements, and OPEC," Goldman Sachs analysts said in a note.

"This lower-for-longer oil price will put significant pressure on the integrated oils, forcing a rethink of dividends, in our view.

"As a result, we downgrade the sector outlook to 'cautious' from 'neutral'".

Last week, Goldman Sachs warned that the rebound in oil prices was “premature”, adding it expected a series of decline in prices to rebalance the market.

Brent crude futures have gained 12% since the turn of the year and have rallied 40% from their 2014 low.