Analysts at Goldman Sachs believe cheap oil will be available for the next 15 years.
According to the financial firm, there is a 50% chance that oil prices will drop below $20 a barrel when refineries shut in October or March for maintenance.
Goldman’s long-term forecast for crude is at $50 a barrel, according to head of commodities research, Jeffrey Currie.
The company cites a global surplus that is bigger than originally thought. The company also says a failure to reduce production fast enough. Currie says stockpiles will soon be at capacity which may force some producers to cut output.
“When we think of the longer term oil price, yes we put it at $50 a barrel,” he said. “However the risks are to the downside given what’s happening in the other commodity markets and the macro markets more broadly.”
Low oil prices are also be helped along by weaker currencies in commodity-producing countries, where iron ore, copper, and steel has experienced a sharp declining in price.
The U.S. benchmark West Texas Intermediate crude futures were 1.3 percent lower at $46.52 a barrel on the New York Mercantile Exchange at 11:24 a.m. London time. Prices are down 13% this year and 50% over the last 12 months.