By Marko Vidrih on The Capital
Oil prices are likely to fall in the coming weeks due to uncertain prospects for demand and a “frightening” overweight supply, Reuters writes with reference to an analytical note by Goldman Sachs, an American investment bank.
As a result, Goldman Sachs expects that the price of Brent crude oil in the short term will reach $35 per barrel, compared with $43 on Monday.
“The collapse in (refining) margins to unprecedented lows is reflective of both over-valued crude prices as well as a more moderate demand recovery, two pillars of our short-term bearish view,” the agency cited the bank’s experts.
Goldman Sachs writes that expectations around demand prospects outstrip its real “more gradual and still uncertain recovery” and “the oil market is facing a big problem of normalizing a billion barrels of excess reserves.”
At the same time, Goldman raised its forecast for the price of Brent crude oil for 2020 to $40.4 per barrel from $35.6 earlier, citing positive sentiment around the resumption of economic activity.
According to the bank’s forecasts, the average price of WTI crude oil this year will reach $36, compared with the previous estimate of $33.1.
Author: Marko Vidrih
Featured image credit: Unsplash
Post fetched from this article