Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Oil prices are set to languish near current lows in coming months as the collapse of a deal among major producers to curb output hammers a market already reeling from falling demand due to the coronavirus, a Reuters survey showed on Friday.

Analysts in the snap poll slashed their forecasts of Brent crude prices to $42 a barrel on average this year versus the $60.63 consensus in the February monthly poll.

The global benchmark is expected to average about $34.87 in the second quarter and $39.05 in Q3, before regaining some ground to $44.08 in the final quarter. The survey of 21 analysts forecast U.S. crude will average $30.37 per barrel in Q2 and about $37 for the year.

Story continues below advertisement

“The end of OPEC+ was long overdue and lower prices are here to stay at the very least for the next couple of quarters. Both Brent and West Texas Intermediate crude will need to get used to sub-$30 oil prices,” said Edward Moya, a senior market analyst at broker OANDA.

Crude futures plunged over 30% at one point on Monday, the largest one-day slide since the 1991 Gulf War, after the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, failed to agree an extension to their output cuts. [O/R]

In a resultant Saudi-Russian price war and race for market share, Saudi Arabia slashed the official selling price for its crude grades to all destinations and plans record production in April.

“Its (Saudi’s) move to raise production and offer crude oil at deep discounts is an attempt to punish and pressure Russia while at the same time squeezing the U.S. shale industry and many other high-cost producers,” said Florent Pelé from Societe Generale.

U.S. shale producers, meanwhile, rushed to deepen spending cuts and reduce future production.

The OPEC+ deal collapse added to concerns of demand being squeezed by the rapid global spread of the coronavirus pandemic, which has paralysed supply chains and triggered a rout in financial markets.

Global oil demand is expected to mark its first quarterly decline for the first time since 2009, with most analysts predicting a drop of anywhere between 0.8 million barrels per day (mbpd) and 4 mbpd in the first half of 2020. For the year, a modest demand growth of 0.1-0.5 mbpd is expected.

Story continues below advertisement

“The prognosis for the oil market is even more dire than in November 2014, when such a price war last started, as it comes to a head with the significant collapse in oil demand due to the coronavirus,” Goldman Sachs said in a note.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies