FXStreet (Delhi) – Research Team at Goldman Sachs, suggests that downside risk for oil remains our top risk. Key Quotes “Like last year, we continue to view downside risk to oil prices as the key risk to our constructive view. In addition to steeper and persistent declines in oil prices, we see three other risks to our views. The first is a sharp slowdown in China growth. The second risk is that the current fundamental weakness across many sectors gains a critical mass and becomes a directional driver of spreads. The third risk is constrained access to capital markets, a low probability event, in our view.” “We have been forecasting weak commodity returns since last fall, although the extent of this weakness has far exceeded our initial expectations. While our negative forecasts were initially driven by the shift in the commodity supply cycle, recent GDP growth weakness and China’s growth rebalancing have exacerbated negative returns.” “We believe that, while nascent, the supply adjustments to date are still insufficient, and demand has either done too little to offset this s low supply adjustment (OpEx commodities), or seen outright declines (CapEx commodities). This sustains the need for lower prices for even longer, keeping us underweight commodities for the next 12 months.” For more information, read our latest forex news.