US, WASHINGTON (ORDO NEWS) — Goldman Sachs lowered its third-quarter forecast for Brent crude oil by a third to $ 20 per barrel and expects global demand to fall to a record high of 1.1 million barrels per day this year amid the impact of the coronavirus epidemic on economic growth.
If this forecast is realized, Brent futures will be at a minimum since February 2002.
“Such a fall … will be consistent with previous major bear markets of 1999, 2009 and 2016,” the bank note dated March 17 said.
According to the bank’s forecast, in the first and second quarters an excess of supply in the oil market is expected at 3.9 million barrels per day and 5.7 million barrels per day, respectively.
While global storage capacities, including US strategic reserves, of about 1.1 billion barrels, can accommodate this surplus, “the speed of the forthcoming stockpiling will now certainly exceed the capacity to fill the capacities,” the note says.
On the other hand, a decrease in supply and a recovery in demand could lead to a deficit in the oil market of 1.5 million barrels per day by the fourth quarter, the bank said, keeping the forecast for Brent prices in the third and fourth quarters at $ 30 per barrel and $ 40 per barrel respectively.
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