By Ovunc Kutlu
ANKARA
Oil prices will continue to decline in 2015, a report by Goldman Sachs, the U.S. multinational investment banking firm, predicted on Sunday.
Brent crude oil prices will decrease to $85 and West Texas Intermediate to $75 per barrel, according to the commodities research report, entitled "The New Oil Order."
Brent crude oil, the leading global benchmark price for oil trading, bounced off its lowest point in four years of around $82 per barrel, and steered between $86-$87 throughout last week, before falling below $86 on Friday.
West Texas Intermediate, the American benchmark for oil pricing, continued its decline as well, falling to $81 per barrel on Friday.
Goldman Sachs forecast Brent crude oil price to be $85 and West Texas to be $75 per barrel for the first quarter of 2015, adding that both benchmarks will continue to decline in the second quarter, reaching $80 and $70 per barrel respectively.
The long-term forecasts for 2016 show $90 per barrel for Brent and $85 for West Texas, according to the report.
The report said that the decline in 2015 will result from increasing oil production, global oil demand being surpassed by overall supply and U.S. shale oil production costs getting lower.
Goldman Sachs expects that Saudi Arabian oil production will decrease slightly, as other OPEC -- Organization of the Petroleum Exporting Countries -- will follow the Saudis.
"We still expect that OPEC will remain a swing producer, it will no longer act as the first-mover and will wait for evidence of a slowdown in shale production growth to meaningfully curtail production," the report said.
Moreover, Saudi Arabia has begun to focus on market share, as it lost market diversification and started making price cuts for Asia in October and November, according to Goldman Sachs.
According to the report, non-OPEC countries will increase their production significantly as offshore production in Brazil and the Gulf of Mexico will rise, while the oil supply disruptions in Libya, Iran and Iraq have eased in the last six months.
Goldman Sachs expects oil production growth in Colombia, Azerbaijan and Iraq while production in Russia, Libya and Iran will remain stable in 2015.
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