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It Looks Like $80 Oil Is Here to Stay

The oil selloff appears to be permanent. Record-breaking increases in U.S. production, a resurgent Libya, and Saudi Arabia lowering its prices in a bid to keep its share of Asian customers—all of it has combined to knock oil prices down 25 percent since June, and there might be more room to fall.

A “structural transition has been reached,” analysts at Goldman Sachs wrote this week, and the ability to determine oil prices has shifted from OPEC to the U.S. The report, entitled “The New Oil Order,” argues that it’s time for American oil producers to slow down in the face of weak demand growth around the world and the quick pace of change. Goldman predicts that U.S. West Texas Intermediate oil will hit $75 a barrel during the first half of 2015 and that Brent will settle around $85 a barrel, about where it is now.