LONDON: Oil renewed its decline on Monday, dropping below $49 a barrel as Goldman Sachs slashed its short-term price forecasts and Gulf producers showed no signs of curbing output.
Brent and U.S. crude are near their lowest since April 2009, having fallen for seven straight weeks on a growing supply glut.
The February Brent contract was down $1.33 at $48.78 a barrel at 1220 GMT. U.S. crude oil for February was down $1.20 at $47.16 per barrel.
Analysts at Goldman Sachs cut their three-month forecasts for Brent to $42 a barrel from $80 and for the U.S. West Texas Intermediate contract to $41 from $70 a barrel. The bank cut its 2015 Brent forecast to $50.40 a barrel from $83.75 and U.S. crude to $47.15 a barrel from $73.75.
Despite declining investments in U.S. shale oil, the main driver in the current supply glut, production will take longer to come down, Goldman said in a report.
"To keep all capital sidelined and curtail investment in shale until the market has rebalanced, we believe prices need to stay lower for longer," the analysts said.
Speaking to Reuters Global Oil Forum, Commerzbank analyst Carsten Fritsch said he expected output cuts to start impacting prices in the second half of 2015.
"At some point market participants will realise that a lot of oil will leave the market if prices stay low," Fritsch said.
As OPEC's November decision not to curtail production in the face of falling prices piles pressure on some group members, Venezuelan President Nicolas Maduro met Saudi Arabia's Crown Prince Salman in Riyadh on Sunday as part of a diplomatic tour in the Gulf to discuss falling oil prices.
However, Saudi Arabia, the world's biggest oil exporter, has said it won't support prices by cutting production and ignored calls from smaller OPEC members, including Venezuela, to react to falling oil prices at the cartel's November meeting.
On Saturday Iran vowed to help Venezuela stem the oil price fall.
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