The drop should be mainly caused by uncertainty around demand for the strategic commodity, or rather speed of its recovery. The speed will depend on mitigating the economic crisis, which the world is currently facing. “The collapse in margins to unprecedented lows, over-valued oil prices and slower demand recovery represent two pillars of our predictions that oil prices will further decline,” the bank wrote in its statement.
According to Goldman Sachs, Brent oil price will return to prices around $35 per barrel, while oil was traded $8 higher on Monday. It might have been caused by the fact that OPEC+ has announced it extended oil production cuts of almost 10 million barrels per day into July, less than the usual production was back in February. In case Brent oil price drops to $35 per barrel, its price will still be roughly 118% higher than in April, when it was traded for $16 per barrel – the lowest price since June 1999.