BARCLAY slashed its oil price forecasts for 2020 earlier this month, citing OPEC’s failure to convince its allies including Russia to cut production further, which led to Saudi Arabia saying it would raise its output in April despite sluggish global demand.
The bank lowered its 2020 Brent price forecast to $43 per barrel and West Texas Intermediate price outlook to $40.
The bank had previously forecast Brent prices at $59 per barrel for this year and West Texas Intermediate at $54, as of end-February.
Barclays’ analysts wrote in a note: “Oil markets face a moment of truth as disagreement between key OPEC+ members means unhinged supplies will likely overwhelm near-term market balances amid large-scale demand destruction due to virus containment measures.”
Earlier this month prices suffered their biggest daily rout since 1991 after Saudi Arabia and Russia began their price war even as coronavirus was expected to curtail global demand growth.
After the OPEC deal fell apart, several other banks also slashed their oil price forecasts for this year on the belief that supply would overwhelm global oil markets.
The outlook was first reported by Reuters.
