Goldman Sachs has revised lower its oil price forecast second quarter and third quarter oil to $30 per barrel and has warned its clients about the possibility of dips in prices to operational stress level and well-head costs near $20 per barrel.
“The prognosis for the oil market is even more dire than in November 2014, when such a price war last started, as it comes to a head with a significant collapse in oil demand due to the coronavirus. This is the equivalent of a 1Q09 demand shock amid a 2Q15 OPEC production surge for a likely 1Q16 price outcome,” Goldman Sach’s analysts including Damien Courvalin wrote in a report.
The announcement pressured already severely hurt benchmarks after the failed meeting of OPEC+ on Friday when Russia refused to take part in further cuts that would have reduced global oil production by a total 3.6 million bpd.
“This completely changes the outlook for the oil and gas markets, in our view, and brings back the playbook of the New Oil Order, with low-cost producers increasing supply from their spare capacity to force higher-cost producers to reduce output,” GoldMan Sach said.
Brent has declined almost 22 percent to $35.41 per barrel so far today.
