Oil traders are experiencing the collapse of the market amid the collapse of the deal, OPEC+ and the epidemic of the novel coronavirus, said that the situation may deteriorate and the price of oil falls to $20 per barrel or lower.
This writes Bloomberg, RBC.
This forecast was given 18 out of 20 respondents by Agency experts. WTI, in their opinion, will be traded for another $3-5 cheaper. While such a low value can stay a few weeks and before the end of the year, said the news Agency.
According to the Director of the Indian oil company Bharat Petroleum Corp Raramuri Ramachandran, above $20 oil “easily breaks” by the middle of April. And this despite the fact that oil prices this year has fallen in price by 60%, dropping to a minimum of 2003, the Agency said.
A number of traders indicated that the price of oil fell so much that some players started to buy fuel, to form a stock in the hope of future growth, writes Bloomberg. Other traders believe that prices will continue to decline to a level where manufacturers will cease to make a profit, forcing them to stop production and stop delivery. Low part of the traders said the cost of production of us shale oil.
“WTI will fall below the cost of production of shale oil in the United States, which is about $20 [per barrel],” said analyst of Chinese hedge Fund, Shanghai Investment Management Co Youlin Zhang Chengfen. In his opinion, oil prices per month can reach $15.
Analysts at major banks also believe that the price of oil in the coming months will continue to decline. Experts at Goldman Sachs, in particular, reported that the Bank has lowered the forecast cost of Brent in the second quarter of 2020 for $10 to $20 per barrel.
The baseline scenario of Citigroup, in turn, provides for a barrel of Brent in the second quarter at an average of $17 or below. The worst scenario of the Bank implies a fall in oil prices to $5 per barrel or even negative real rates in some regions because of lack of storage and problems with logistics.
Consulting firm Energy Aspects said that the price of Brent may fall in April to $10 a barrel, despite the fact that in General in 2020, prices will probably remain at $20. Investment analyst at Mizuho Securities USA LLC Paul sledge is also marked with negative prices, which, in his opinion, is possible if the production of shale oil will not be reduced faster than accumulate reserves. But this is a dubious scenario, he said.
“This operation “desert Storm”, Enron, 9/11, hurricanes Katrina/Rita and Lehman Bros combined. And we Wake up with this combo every day,” — said the head of energy consulting company Schork Group Ink Stephen Shork.
The price of oil began to fall after the collapse of the deal, OPEC+ and the epidemic of the novel coronavirus. On 18 March the price of Brent crude oil fell below $25 per barrel, while WTI dipped below $21 for the first time since February 2002. On 19 March the price of Brent rose more than 17%, WTI — by 35%.