Goldman said Brent crude prices have had an additional impact on global oil demand of 1.5 million barrels per day from the impact of COVID-19 in Europe and China for the next three months.
see photosUS West Texas Intermediate crude was down 35 cents at $78.15 a barrel by 0031 GMT on Wednesday.
Analysts at Goldman Sachs said a coordinated release from government oil reserves, led by the United States, could supply roughly 70 million to 80 million barrels of crude oil, more than the 100 million barrels the market is pricing in.
“On our pricing model, such a release would cost less than $2/bbl, which would be significantly less than the $8/bbl sales that have occurred since the end of October,” the bank said in the caption, “A Drop in the Ocean”. Said in a note. Dated 23 November.
Global oil prices hit a one-week high on Tuesday after the United States and other consumer countries moved to release oil from strategic petroleum reserves (SPRs) to try to cool the market, falling short of some expectations. Went.
US West Texas Intermediate crude was down 35 cents at $78.15 a barrel by 0031 GMT on Wednesday.
Global powers and Iran will meet on Monday to revive talks on a nuclear deal that could lift US sanctions on Iranian oil, allowing Tehran to increase exports.
“The total size of the release of about 70-80 MB (million barrels) was smaller than the 100+ MB that the market was pricing in, with the swap nature of most of these barrels even smaller, around 40 million barrels net, 2022- Increase in oil supply in 23,” Goldman said.
“This is in terms of the market currently up to 2mb/d.”
Goldman said Brent crude prices have had an additional impact on global oil demand of 1.5 million barrels per day from the impact of COVID-19 in Europe and China for the next three months.
“We view the next three months as potentially extreme concerns, excluding the recent sell-off overshooting fundamentals due to a year-end decline in business activity,” the bank said.
While the coordinated government stock release would guarantee a $2 per barrel downgrade to the bank’s year-end Brent price forecast, it is expected to offset the risk of a lack of progress on talks with Iran.
Global powers and Iran will meet on Monday to revive talks on a nuclear deal that could lift US sanctions on Iranian oil, allowing Tehran to increase exports.
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“Furthermore, OPEC may consider halting its production hikes to offset the detrimental SPR effect of lower oil prices on the needed recovery in global oil capex, potentially posing such action to COVID demand risks. as prudent,” the bank said.
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