Goldman Sachs on Tuesday dramatically slashed its oil forecast for the rest of 2016, warning that supplies will continue to outstrip demand regardless of what happens at an oil-producers meeting in Algiers this week. The analysts, led by Damien Courvalin and Jeffrey Currie, lowered their crude oil forecast for the fourth quarter to $43 a barrel from $50 previously. The downgrade comes as major oil producers are gathering for an informal meeting, with all eyes on whether OPEC and non-OPEC members will agree on a production deal. "While a potential deal could support prices in the short term, we find that the potential for less disruptions and still relatively high net long speculative positioning leave risks skewed to the downside into year-end," the analysts said. Goldman Sachs expects a ramp up in production from countries such as Kazakhstan, Russia and Canada. "With our demand outlook unchanged, with year-on-year growth of 1.4 mb/d, this leaves us now forecasting that inventories will build in 4Q16 by 400 kb/d vs. our prior expectation for a 300 kb/d draw during the quarter," GS said.
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