SINGAPORE (Reuters) - Goldman Sachs on Thursday joined the view that oil prices will remain "lower for longer" after forward prices, commodity currencies and energy equities reached levels not seen since 2005.
Analysts at the influential bank argue that the economic environment for the oil industry has changed fundamentally due to higher financial and operational stress, declining costs, productivity gains and a stronger dollar.
"These differences reflect not only a further deterioration in fundamentals, but also the financial markets' decreasing confidence in a quick rebound in prices and a recognition that the rebalancing of supply and demand will likely prove to be far more difficult than what was previously priced into the market," Goldman Sachs analysts said in a report.
"As shale has dramatically reduced the time between when producers commit capital and when they get production from several years to several months, oil prices now need to remain lower for longer to keep capital sidelined and allow the rebalancing process to occur uninterrupted," they said.
The bank maintains its near-term target for U.S. crude (CLc1) at $45 a barrel, but warns that risk is skewed substantially lower.
(Reporting by Jacob Gronholt-Pedersen; Editing by Clarence Fernandez)