Goldman Sachs: slim chances for oil price to fall below $20 per barrel

Goldman Sachs head of commodities research Jeff Currie said to Reuters on Thursday that chances of oil price falling below $20 per barrel is lower than 50 per cent.

“I put the likelihood at below 50 percent,” Currie told reporters.

“We estimate there are 370 million barrels still available (in storage globally),” he said.

Brent eased 6 cents to $49.09 a barrel by 0753 GMT. On Wednesday it hit a low of $48.71, the weakest since Oct. 5.

US crude fell 42 cents to $46.22 a barrel after settling down 2 cents at $46.64.

Data from industry group the American Petroleum Institute showed U.S. crude stocks rose by 9.4 million barrels in the week to Oct. 9 to 465.96 million, versus analyst forecasts for a 2.8 million barrels build.

Some analysts pointed to further weakness in the months ahead with a possible eventual interest rate rise in the United States pushing the dollar higher, which makes oil more expensive for holders of other currencies.

“So here is the set up: In December the Fed will hike rates and OPEC will not cut output. In Q1 of 2016, global oil inventories rise further and oil prices will drop,”

Bjarne Schieldrop chief commodity analyst at SEB in Oslo told the Reuters Global Oil forum.

The Organization of the Petroleum Exporting Countries meets in December. The produer group is expected to hold to its policy of maintaining market share, highlighted by Saudi Arabia’s push into Russia’s regional market

The world’s big oil exporters pumped more than half a billion barrels more crude than needed in the first nine months of this year, industry dataindustry data gathered by Reuters and major energy market forecasters show.

In the first nine months of 2015, China’s crude imports rose 8.8 percent to 248.62 million tonnes.

Traders said that Brent had found some support above $49 due to the strong Chinese imports.

BMI Research, part of the Fitch ratings agency, said in a note that China’s crude oil imports would continue to grow over the next five years at an average annual rate of 3.2 percent.

“This will be a result of higher refinery run rates to produce gasoline and continued strategic stockpiling activity up to 2020, which will help to override macroeconomic headwinds to domestic crude demand,” it said.