Goldman Sachs: Prepare For A Massive Oil Demand Shock
03.30.2020 By Greta Talmaci - NEWS

March 30, 2020 [Oil Price.com] – Global oil demand could plummet by 18.7 million bpd in April, deepening an expected demand plunge of 10.5 million bpd for March, Goldman Sachs said, while the coronavirus pandemic continues to claim thousands of lives and forces a growing number of major economies into lockdown.

 
A demand shock of this magnitude will overwhelm any supply response including any potential core-Organization of the Petroleum Exporting Countries output freeze or cut,” Goldman Sachs said in a note this week, as carried by Reuters.

According to the investment bank, such a demand shock would need several million barrels of oil per day taken off the market. Goldman Sachs’s view about demand destruction is echoed by the world’s largest independent oil trader, Vitol, as analysts and trading houses race to reduce their demand outlooks and oil price forecasts by the week.

Vitol expects that oil demand could slump by 15 to 20 million bpd at its peak over the next few weeks, chief executive Russell Hardy told Bloomberg in an interview earlier this week. On an annual basis, Hardy said, this would contribute to a demand decline of 5 million bpd.

It’s pretty huge in terms of anything we’ve had to deal with before,” Vitol’s chief executive said.

This week, Barclays slashed its oil price estimates for this year for the second time in two weeks, expecting WTI Crude to average $28 a barrel in 2020 due to the demand shock from the coronavirus and the supply shock from the Saudi-Russian oil price war. As early as March 9, Goldman Sachs had warned that $20 oil was on the horizon.

Amid reports that the U.S. is pressuring Saudi Arabia to backpedal on its promise to flood the market with oil when demand is cratering, ING strategists Warren Patterson and Wenyu Yao said on Thursday that “The issue for the oil market is that even if we do see some restraint from the Saudis, the world is still set to see a significant oil surplus over 2Q20, given the demand hit we are currently seeing.

Our base case view is that the price war continues over the upcoming quarter, which would see ICE Brent moving towards US$20/bbl over 2Q20,” ING’s strategists said.

————-

Click Here to Access Today a 4,900 Tank Terminal Database With a Pro Trial
Click on the button and register to get instant access to actionable tank storage industry data

IKAV, VTTI Buy Majority Stake in Italy's Biggest LNG Terminal
03.28.2024 - NEWS
March 28, 2024 [Reuters]-Dutch infrastructure group VTTI and German asset manager IKAV have teame... Read More
Neste Oyj : Supplying Sustainable Aviation Fuel to Emirates for Flights From Amsterdam Airport Schiphol
03.28.2024 - NEWS
March 28, 2024 [Market Screener]-Neste has started supplying sustainable aviation fuel (SAF) to E... Read More
France Gets EC Nod for EUR-900m Biomass, Hydrogen State Aid Plan
03.28.2024 - NEWS
March 28, 2024 [Renewables Now]-The European Commission (EC) has approved France’s plan for a E... Read More
A Milestone Moment Port Arthur LNG Celebrates One Year of Achievement
03.28.2024 - NEWS
March 28, 2024 [Storage Terminal Magazine]-The groundbreaking ceremony for the Port Arthur LNG Ph... Read More