US, WASHINGTON (NEWS OBSERVATORY) — Goldman Sachs analysts lowered the forecast for Brent crude oil prices to $ 30 per barrel in the second and third quarters of this year from the previously expected $ 47 and $ 53 per barrel, respectively, against the backdrop of the outbreak of a price war on the oil market.
The WTI price forecast for the second quarter was lowered to $ 29 from $ 42.5 per barrel, for the third quarter – to $ 28 from $ 48.5 per barrel.
“The forecast for the oil market is even darker than in November 2014, when the price war started last time, because (this time – IF), it coincided with a noticeable decline in oil demand due to coronavirus,” analysts say.
At the same time, Goldman Sachs expects faster equilibrium recovery in the oil market due to the fact that shale oil producers and companies with high production costs even before the fall in black gold prices faced capital appreciation due to low stock returns.
Analysts believe that shale oil production will decrease by 75 thousand bpd in July-September and by 250 thousand bpd in October-December 2020 compared to the previous quarter. At the same time, they forecast a deficit in the global oil market starting in the fourth quarter of this year.
The forecast of Brent prices for the fourth quarter is $ 40 per barrel against the previously expected $ 59 per barrel, WTI – $ 37 against $ 54.5 per barrel. In 2021, this grade of oil will continue to rise in price from $ 45 per barrel in the first quarter to $ 60 per barrel in the fourth quarter, the price of WTI will rise respectively from $ 41 to $ 56, experts expect.
Goldman Sachs proceeds from the assumption that the OPEC + countries will not be able to reach a new agreement to reduce production in the coming months, and any response can be taken only with an even greater drop in prices.
Moreover, according to analysts, the previous OPEC + agreement was “unbalanced and economically unreasonable.”
Oil prices on Monday, March 9, collapsed at the fastest pace since the 1991 Gulf War: May Brent futures fell 24% to $ 34.36 per barrel, April WTI futures fell 25%, to $ 31.13 per barrel. Saudi Arabia, having failed to obtain last Friday, March 6, Russia’s consent to further reduce oil production in response to a sharp decline in demand due to coronavirus, decided to increase production and lower prices for buyers.
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