Oil extends losses over weak price outlook

Oil moved lower in Asian trade today after Goldman Sachs slashed its price forecasts for the next two years owing to a global supply glut.

US benchmark West Texas Intermediate (WTI) for December delivery fell 46 cents to $80.54 while Brent crude for December eased 59 cents to $85.24 in mid-morning trade.

"We continue to see oil prices drift lower, and with nothing significant happening, the Goldman report is still on investors' minds," David Lennox, resource analyst at Fat Prophets in Sydney, told AFP.

Goldman yesterday said it expects WTI to sink to $70 a barrel by the second quarter of next year before rising back to $80 in 2016. That was $15 a barrel lower than its previous forecast.

The Wall Street giant's outlook on Brent is for it to fall to as low as $80 by the second quarter, staying weak through 2015 before returning to $90 level in 2016.

It pointed to the impact of strong US shale oil output as well as the inability of the OPEC oil cartel to act as a swing producer that can tighten global supplies and prices.

Given the rising glut on the global market, "US production growth needs to slow", Goldman said in a client note.

Lennox said investors will be monitoring the latest US stockpiles report due tomorrow.

The US Department of Energy (DoE) last week reported a 7.1 million barrel surge in crude reserves in the week to October 17.

The surge, more than double market expectations, added to worries about a global oversupply, further dampening prices.

"Further increases in US stockpiles will reinforce the weak price forecast by Goldman and others," Lennox said.