Goldman Sachs has revised its oil price forecast downward, anticipating continued pressure on prices due to oversupply and decreased demand. The investment bank cites the ongoing coronavirus pandemic and the Saudi Arabia-Russia price war as key factors influencing the market. They predict that prices could fall further before any potential recovery.
Goldman Sachs anticipates further declines in oil prices, revising its forecasts downward amid persistent oversupply and weakened demand. The investment bank points to the combined impact of the coronavirus pandemic and the price war between Saudi Arabia and Russia as primary drivers of this bearish outlook.
Key Factors Influencing the Forecast
- Coronavirus Pandemic: The global spread of COVID-19 has significantly reduced travel and industrial activity, leading to a sharp decline in oil consumption.
- Saudi Arabia-Russia Price War: The ongoing dispute between the two major oil producers has resulted in increased production and a glut in the market.
Revised Price Targets
Goldman Sachs analysts have lowered their price targets for Brent crude and West Texas Intermediate (WTI) crude, suggesting that prices could fall to levels not seen in years. The bank believes that storage capacity is becoming increasingly constrained, which could further exacerbate the downward pressure on prices.
Potential for Recovery
While the near-term outlook remains bleak, Goldman Sachs acknowledges the potential for a recovery in oil prices once the coronavirus pandemic subsides and demand begins to rebound. However, the timing and pace of this recovery remain uncertain.