Goldman Sachs: We see 15yrs of weak crude, as barrel price may drop to $20

Prices may drop to $20 when refineries shut in October, March
Analyst Currie says bank's long-term forecast for crude at $50

A glut of crude may keep oil prices low for the next 15 years, according to Goldman Sachs Group Inc.
There’s less than a 50 percent chance that prices will drop to $20 a barrel, most likely when refineries shut in October or March for maintenance, Jeffrey Currie, head of commodities research at the bank, said Wednesday in an interview in Lake Louise, Alberta. Goldman’s long-term forecast for crude is at $50 a barrel, he said.
Goldman cut its crude forecasts this month, saying the global surplus of oil is bigger than it previously thought and that failure to reduce production fast enough may require prices to fall near $20 a barrel to clear the glut. Prices may touch that level when stockpiles are filled to capacity, forcing producers in some areas to cut output, Currie said Wednesday.
“The last time we saw a period that was similar to today was 1986, 29 years ago,” he said. “We waited 15 years” for oil to start rising again.
Lower iron ore, copper and steel prices as well as weaker currencies in commodity-producing countries have reduced costs for oil companies, according to Currie. The world is shifting from an “investment phase” of a 30-year commodity cycle to an “exploitation phase,” with shale fields as an important source of output, he said. While Goldman’s official forecasts extend to 2020, there is a “very high probability” prices will stay depressed until the end of next decade, he said.
U.S. benchmark West Texas Intermediate crude futures were 0.1 percent lower at $47.11 a barrel on the New York Mercantile Exchange at 10:54 a.m. New York time. Prices are down about 12 percent this year and have plunged more than 50 percent over the past 12 months.

Fed Rates
The U.S. Federal Reserve may “leave a lot of negative uncertainty in emerging markets,” potentially affecting oil demand, if it doesn’t raise 
rates at its meeting this week, Currie said.
The Federal Open Market Committee will release its policy statement along with quarterly economic projections Thursday in Washington. It will weigh the impact on the U.S. outlook from slowing growth overseas and falling stock prices, as committee members determine whether to end almost seven years of near-zero interest rates. Economists are close to evenly divided on the outcome, with 59 of 113 surveyed by Bloomberg expecting the Fed to stand pat.
While a “dovish hike” in interest rates would reduce uncertainty in emerging markets, any adjustment would be a “relatively small story” for crude, Currie said

http://www.bloomberg.com/news/articles/2015-09-17/goldman-sees-15-years-of-weak-crude-as-20-u-s-oil-looms-on-glut