WTI recovers above $80 on Goldman Sachs outlook

West Texas Intermediate (WTI) crude oil has advanced above $80 per barrel in commodities trading markets today (October 17th), following comments from the Goldman Sachs Group.

The contract has declined into a bear market and prices are on course for a third successive weekly decline amid speculation Saudi Arabia and other members of the Organization of Petroleum Exporting Countries (OPEC) will refrain from making supply cuts at the current time. 

Both Saudi Arabia and Kuwait have indicated the fall in oil prices does not yet warrant immediate reductions in production, furthering concern the slide may be prolonged.

However, Goldman Sachs' head of commodities research Jeffrey Currie today stated: "Prices have likely overshot to the downside, particularly as the lower we go, the tighter the near-term balances become.

"This leaves us near-term constructive despite being long-term bearish."

In addition, BNP Paribas and Bank of America have also predicted the price rout may be over, indicating a shared belief OPEC will reduce its output as the US pumps the most oil in almost 30 years, despite global growth slowing.

The country is the world's largest oil consumer and its crude inventories expanded by 8.92 million barrels to 370.6 million in the week ending October 10th, the Energy Information Administration's most recent report revealed. This is the highest level since July.

Production accelerated for a second week, reaching 8.95 million barrels per day, the most since June 1985. 

On October 14th, the International Energy Agency forecast global oil demand will increase by 650,000 barrels per day for the full-year 2014 - the slowest pace of growth since 2009. This is down by 250,000 from the organisation's original prediction.

Early in the European trading session, WTI for November delivery was trading at $82.68 per barrel on the Comex division of the New York Mercantile Exchange, having advanced by 1.1 per cent yesterday - the contract's first gain in four days.