In its latest client note, Goldman Sachs Analysts cut its Brent crude oil price forecast for Q2 2020 by a third to $ 20 per barrel.
“Global demand would drop a record of 1.1 million barrels per day (bpd) this year as the coronavirus epidemic slams economic growth.
Such a fall ... would be consistent with the prior large bear markets of 1999, 2009 and 2016.
The demand hit from the virus could peak in late March, at 8 million bpd, forecast a supply surplus of 3.9 million bpd and 5.7 million bpd in the first and second quarters respectively.
While global storage capacity inclusive of the US strategic reserve, at about 1,100 million barrels, could accommodate this surplus, the velocity of the upcoming inventory builds is now certain to overwhelm the ability to fill storage.
The bank kept its third- and fourth-quarter Brent price outlook unchanged at $30 a barrel and $40 a barrel respectively.”
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