American investment banking and financial services firm Goldman Sachs lowered its oil price forecast for 2019 citing rising oil output, high inventory and low global demand, the company said Monday.
The firm said in a note that it expects international benchmark Brent crude to average $62.50 per barrel this year, down from its prior estimate of $70 a barrel.
American benchmark West Texas Intermediate is now forecast to average $55.50 a barrel in 2019, down from the previous expectation of $64.50 per barrel.
"We expect that the oil market will balance at a lower marginal cost in 2019 given higher inventory levels to start the year," the note said.
Rising shale oil production in the U.S. and increased low-cost production capacity during 2018 have added to oversupply in the global oil market, according to the firm.
The U.S.' crude oil output rose to a record high level in November to take the top spot in the world surpassing Russia and Saudi Arabia, which also saw their crude production reach all-time highest levels during the same month.
Goldman Sachs said "weaker than previously expected demand growth expectations" is another major factor that will keep oil prices under pressure on the demand side.
Major institutions also join Goldman Sachs in revising down oil price forecasts amid expectations of lower overall global demand with an anticipated deceleration in the global economy.
The International Monetary Fund said on Oct. 8 that it lowered its forecast for global economic growth for 2019 to 3.7 percent, from its earlier estimate of 3.9 percent.
The Organization for Economic Cooperation and Development on Nov. 21 lowered its global growth estimate for 2019 to 3.5 percent, from its previous estimate of 3.7 percent.
Another U.S. investment major JP Morgan said on Nov. 22 that it lowered its Brent crude price estimate for 2019 to $73 per barrel, from its previous forecast of $83.50 a barrel.
American investment banking firm Morgan Stanley said on Dec. 10 that it lowered Brent crude to $68.50 per barrel in 2019, down from its earlier estimate of $78.50.
The U.S.' Energy Information Administration said on Dec. 11 that Brent is estimated to average $61 a barrel next year, down from the previous forecast of $72 per barrel.
By Ovunc Kutlu