Crude oil futures fell sharply on Friday, after Goldman Sachs (NYSE:GS) lowered its forecast for oil prices amid ongoing concerns over a global supply glut. Influential Wall Street investment bank Goldman Sachs lowered its 2016 forecast for U.S. crude to $45 a barrel from $57 previously, and Brent to $49.50 from $62, citing oversupply and concerns over China’s economy. “The oil market is even more oversupplied than we had expected and we forecast this surplus to persist in 2016,” Goldman said in a note to investors. On the New York Mercantile Exchange, crude oil for delivery in October dropped $1.29, or 2.81%, to end Friday’s session at $44.63 a barrel. Losses were limited amid indications U.S. oil drillers are cutting back on production following a collapse in prices over the summer. Industry research group Baker Hughes (NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. decreased by 10 last week to 652, the second straight weekly decline. For the week, New York-traded oil futures lost $1.19, or 3.08%, as worries over the health of the global economy added to the concerns that a global supply glut may stick around for longer than anticipated. Crude oil prices have been under heavy selling pressure in recent months, as ongoing concerns over a glut in world markets drove down prices. Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production. Elsewhere, on the ICE Futures Exchange in London, Brent for October delivery fell 75 cents, or 1.53%, to close at $48.14 a barrel. London-traded Brent futures lost $1.13, or 2.96%, on the week, amid fears of a China-led global economic slowdown. Meanwhile, the spread between the Brent and the WTI crude contracts stood at $3.51 a barrel by close of trade on Friday, above Thursday’s level of $2.97. Data released Sunday showed that China’s industrial production increased at an annual rate of 6.1% in August, disappointing expectations for a 6.4% gain. A separate report showed that fixed asset investment also fell short of forecasts, indicating that China needs to act to prevent a further slowdown in the economy. The Asian nation is the world’s second largest oil consumer after the U.S. and has been the engine of strengthening demand. China’s slowing economy and global market volatility have created fresh uncertainty over whether the Federal Reserve will hike interest rates when it meets next week. The turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears that the economy may be slowing at a faster than expected rate.
