Oil demand could shrink by 18.7 million barrels per day in April, compared with the estimated 10.5-billion drop in March, Goldman Sachs said in a note dated Wednesday.
The top investment bank has revised its earlier estimate of a drop of four million barrels per day from February to April.
It now predicts that “a demand shock of this magnitude will overwhelm any supply response including any potential core-Organisation of the Petroleum Exporting Countries output freeze or cut”.
The coronavirus pandemic has forced entire economies into lockdowns, disrupting economic activity, supply chains, and a slew of energy-dependent industries, as well as airlines.
Since the beginning of 2020, oil prices have nosedived by almost 50 percent, as decreasing oil consumption coincided with the OPEC+ breakdown and triggered a massive sell-off.
On Thursday, following three days of gains, WTI crude futures fell by 7.7 percent to $22.60 per barrel, while Brent futures slumped 3.7 percent to $26.43 per barrel. There is a strong chance that the prices will remain depressed for months, until the global economy returns to normal.
Goldman Sachs forecasts a “further sharp sell-off in oil prices” in coming weeks, but expects that prices could rebound sharper than its earlier outlook of $40 per barrel Brent by the fourth quarter of the year.
