British investment bank Barclays said it has reduced its Brent and WTI price forecasts by $12 per barrel for 2020, noting that they are now below both the curve and consensus.
Oil markets are under considerable pressure as Saudi Arabia takes desperate action to get Russia back to the negotiating table and governments around the world clamp down on travel and social interaction to curtail the spread of COVID-19.
“Prices are likely to remain under pressure until the virus situation turns the corner, and if we continue on the projected market balances path, even Saudi Arabia and Russia will not be immune from the price fallout, in our view, despite their low cash operating costs,” Barclays said in its Commodities Research report.
“Therefore, unlikely as it may seem at this point, we do not completely rule out a collaborative intervention to support market fundamentals over the short term. Increased volatility, diminishing effect of ever-lower prices on US tight oil supplies and potentially more clarity on the size of demand destruction due to COVID-19 spread are other factors that might nudge Russia in that direction,” it added.
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