Oil-Price Slump Could Force U.S., Non-OPEC Suppliers to Make Deep Cuts

International Energy Agency says U.S. shale-oil output would decline by nearly 400,000 barrels a day next year

By Nicole Friedman and Benoît Faucon, WSJ
Updated Sept. 11, 2015 8:30 p.m. ET

Really? Oil at $20?

Analysts at Goldman Sachs Group Inc., known for its eye-popping oil-price predictions, said the benchmark U.S. oil price may have to tumble to as low as $20 a barrel—from current levels around $45—to clear out a global supply glut.

While $20 oil isn’t the investment bank’s baseline forecast, the radical scenario highlights the surprising strength of world-wide oil output following the past year’s downdraft in prices. It intensifies the debate over how low oil prices have to go before companies from Texas to Saudi Arabia to Russia dial back production in a significant way.

While it has become increasingly clear in recent weeks that U.S. output is declining, market watchers are divided over how much the shale-oil boom will slow and how producers elsewhere will respond. Another wild card is Iran, which has said it will produce as much oil as it can if sanctions are removed.

(More here.)