Yahoo Finance

Thanks to a report by The Wall Street Journal, Persian Gulf-based members of the Organization of the Petroleum Exporting Countries (OPEC), after meeting in Doha, Qatar on September 10, now see oil prices remaining between $40 and $50 for the rest of the year, which is much lower than the $70 or so that the group had originally considered being a fair price.

This new forecast is similar to prices issued on September 9 by the U.S. Energy Information Administration, who noted that 2016 Brent Crude prices will rise and average around $58.57 a barrel. This price will most likely be quite the surprise for OPEC members, especially after three straight years of oil prices averaging more than $100 per barrel.

The plummet in price can be traced back 15 months to June 2014, when oil prices peaked at $115.71. Over the course of this time period, oil has dropped 57%; on September 10, prices per barrel sat at $48.89.

On top of this, Goldman Sachs (GS) has now cut its price forecasts, warning that the market’s excess of crude supplies has the potential to force prices to drop as low as $20 a barrel. This report by the investment firm is a driving factor on oil’s slumping price Friday. Goldman Sachs also cut their 2016 Brent forecast to $49.50 a barrel from the $62 expected previously.

For more information on OPEC, read Zacks’ article Everything You Need to Know About OPEC.

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