Oil prices retreat as Goldman Sachs cuts forecasts

Oil prices dropped Friday as the Wall Street bank Goldman Sachs slashed its forecasts for crude prices.

Goldman trimmed its 2016 price forecast for the US oil price to $45, sharply down from prior prediction of $57 published in May. It also downgraded Brent oil price of 2016 from $62 to $49.5, Xinhua news agency reported.

"In fact, the oil market is even more oversupplied than we had expected and we now forecast this surplus to persist in 2016 on further OPEC production growth, resilient non-OPEC supply and slowing demand growth," analysts of Goldman said in a research, warning that the oil price could tumble as low as $20 amid global supply glut.

The Organization of Petroleum Export Countries (OPEC) crude supply fell by 220,000 barrels per day in August to 31.57 million barrels per day (mb/d), led by declines in Saudi Arabia, Iraq and Angola, according to the oil market report released Friday by International Energy Agency (IEA).

The group's output stood 1.2 mb/d higher than a year earlier.

IEA predicted that the latest drop in the price of oil, which hit a six-year low in August, is expected to cut non-OPEC supply in 2016 by nearly 0.5 million barrels per day.

The West Texas Intermediate for October delivery moved down $1.29 to settle at $44.63 a barrel on the New York Mercantile Exchange, while Brent crude for October delivery lost 75 cents to close at $48.14 a barrel on the London ICE Future Exchange.