Brent: Crude Enters Multi-Year Price Slump

摘要

Following the OPEC+ deal collapse we have revised down our forecast for Brent crude. We now forecast annual averages of USD43.0/bbl, USD45.0/bbl and USD49/bbl in 2020, 2021 and 2022, respectively. 2020 will mark the nadir, as OPEC and Russia food the market and non-OPEC supply continues to rise. Shale production declines and well shut-ins among higher cost producers will help to rebalance the market from 2021. Ultimately, we believe Saudi Arabia will reverse course, as fscal pressures mount and Russia refuses to compromise. From 2022, we expect the kingdom to pare back production and allow prices to recover more fully. Demand growth is set to recover from H220, as the impact of Covid-19 fades and afected economies post v-shaped recoveries. However, the combination of the oil price collapse and spread of the virus has raised global recession risks.