Oil prices plunge as Wall Street cuts price forecast

Oil prices plummeted on Monday as investment banks including Goldman Sachs Group cut their price forecasts.

Goldman Sachs said oil prices need to drop even further for the first half of the year for the market to find a balance between supply and demand.

Excess storage and tanker capacity suggests the market can run a surplus longer than it has in the past, so crude at around 40 dollars will be needed to slow U.S. production, Goldman analysts Jeffrey Currie said in a report Monday.

Societe Generale Monday reduced its average U.S. crude price for this year to 51 dollars, and predicted that Brent would average 55 dollars in 2015.

Commerzbank last Friday lowered its first-quarter Brent forecast to 45 dollars from 65 dollars.

Oil prices retreated recently as there is no sign that the Organization of Petroleum Exporting Countries (OPEC) would cut production in response to the slump.

The United Arab Emirates has no plans to reduce output. Al Otaiba, the ambassador to the U.S., said in Washington last Thursday that the U.A.E. can live with current market conditions for a lot longer than people expect.

U.S. crude production rose 11,000 barrels a day to 9.13 million the week ending Jan. 2, the most in weekly data that started in January 1983,according to the Energy Information Administration ( EIA).

Light, sweet crude for February delivery lost 2.29 dollars to settle at 46.07 U.S. dollars a barrel on the New York Mercantile Exchange,while Brent crude for February delivery decreased 2.68 dollars to close at 47.43 dollars a barrel.