Oil market set for record surplus amid virus-led demand slump: Goldman Sachs - Reuters:
Goldman Sachs said the oil market could see a record surplus of about 6 million barrels per day by April, considering a bigger- than-expected surge in low-cost output, while a slump in demand was “increasingly broad” triggered by the coronavirus outbreak.
Brent was set for its biggest weekly loss since 2008 as oil prices plummeted this week after top producer Saudi Arabia slashed its selling prices amid a price war with Russia and pledged to unleash more supply onto a market already reeling from falling demand due to the virus.
“The high-cost producer response at our second quarter 2020 $30/bbl Brent forecast will not be sufficiently fast to offset the record large inventory builds set to occur in coming months,” the Wall Street bank said in a note dated March. 12.
The jump in inventories could also force some inland high-cost producers to shut production, since storage logistics may be stretched, the bank’s analysts added.
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