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Goldman Sachs cuts 2019 oil price forecast

The investment bank Goldman Sachs has cut both the Brent and WTI oil price forecast by 2019, according to Bloomberg.

Brent is now seen averaging $62.50 per barrel in 2019 - down 10 percent from the previous price forecast of $70. Meanwhile, WTI price average for 2019 has been revised lower to $55.50 per barrel from $64.50.

Key points

Price levels and term structure remain undervalued relative to fundamentals.

The oil market will balance at a lower marginal cost in 2019, given higher inventory levels to start the year, the persistent beat in 2018 shale production growth amidst little-observed cost inflation, weaker than previously expected demand growth expectations (even at our above consensus forecasts) and increased low-cost production capacity.

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