Goldman Sachs expects Brent crude to drop in light of the outbreak of the Coronavirus and turning it into a global pandemic, which reduces demand for supply and increases supply in the market. >
According to ArabiaNet, the bank indicated that the expected cuts to OPEC + production and lower interest rates would not be sufficient to prevent huge stockpiles from building due to declining demand.
The bank expected Brent prices to drop to $ 45 a barrel in April, compared to previous estimates at $ 53 a barrel before gradually recovering to $ 60 by the end of the year.
This is the second revision of the reduction in less than a month, and the bank had reduced its expectations for the price of Brent in the third and fourth quarters to 53 and 59 dollars per barrel from 60 and 65 dollars previously.
On January 22, Goldman Sachs predicted that oil prices would be negatively affected by the Corona virus coming from China, expecting it to decline by 2.9 dollars.
The bank indicated that this virus may lead to a decrease in global oil demand by 260 thousand barrels per day this year, and that jet fuel will represent about two-thirds of the loss, if the losses that occurred in 2003 due to the Sars virus are considered as a measure.
