Falling crude prices cloud oil outlook for next year
Price forecasts are slashed by many analysts but some are more bearish than others, with Opec and US output key factors in future cost of oil
The tumble in crude oil prices over the past four months - down as much as 27 per cent in the steepest fall since the global financial crisis six years ago - has seen analysts slash price forecasts, but their views differ on next year's outlook.
Lower oil prices since June - on the back of concerns about weak demand and oversupply - have already resulted in lower third-quarter profits for the mainland's state-backed oil and gas majors, which in turn cut the volume of work done by companies that provide services to them.
Analysts said crude oil's sharp fall in recent months had overshot market fundamentals, but some are more bearish than others on next year's outlook.
"While large shifts in positioning precipitated a sell-off in oil prices that far exceeded the actual weakening in fundamentals, our confidence in a 2015 oversupplied global oil market has increased," Goldman Sachs analysts said in a report released last week.
They said there were signs that Opec, the oil producers' cartel, might be losing pricing power, citing recent Saudi Arabian price cuts in Asia designed to maintain market share.
They cut their forecast on the average price of the Brent benchmark to US$85 a barrel, from US$100, for next year's first quarter and US$80 in the second quarter.