Goldman Sachs cut its second- and third-quarter Brent price forecasts to $30 per...
- Goldman Sachs cut its second- and third-quarter Brent price forecasts to $30 per barrel, citing the oil price war between Russia and Saudi Arabia and a significant collapse in oil demand due to the coronavirus that has killed more than 3,500 globally.
Oil fell by the most since 1991 on Monday after Saudi Arabia started a price war with Russia by slashing its selling prices and pledging to unleash its pent-up supply onto a market reeling from falling demand because of the virus outbreak. [O/R] A three-year pact between the Organization of the Petroleum Exporting Countries and Russia ended in acrimony on Friday after Moscow refused to support deeper oil cuts and OPEC responded by removing all limits on its own production.
There will be a negligible response from U.S. shale producers in the second quarter, but output will fall in the third quarter by 75,000 barrels per day and a further 250,000 bpd in the fourth quarter of 2020, the bank said.“At that point, the fundamental rebalancing could require oil prices falling to operational stress levels for high-cost producers with well-head cash costs near $20/bbl,” it said.
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