{"id":51821,"date":"2020-03-17T21:11:27","date_gmt":"2020-03-18T02:11:27","guid":{"rendered":"https:\/\/olduvai.ca\/?p=51821"},"modified":"2020-03-17T21:11:36","modified_gmt":"2020-03-18T02:11:36","slug":"oil-plunges-to-17-year-low-as-one-bank-predicts-negative-prices","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=51821","title":{"rendered":"Oil Plunges To 17 Year Low As One Bank Predicts Negative Prices"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.zerohedge.com\/markets\/oil-plunges-17-year-low-one-bank-predicts-negative-oil-prices\">Oil Plunges To 17 Year Low As One Bank Predicts Negative Prices<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Late on Tuesday, WTI plunged as low as $26.20 taking out the lows from the 2015\/2016 oil recession, and sending it to a level last seen when US president was George W. Bush, people were listening to Get Busy by Sean Paul and Dogville was one of the most popular movies: May 2003.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com\/s3fs-public\/inline-images\/wti%203.17.jpg\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">While there was no immediately clear catalyst, earlier in the day, Goldman&#8217;s commodities team published a report in which they discuss the need for commodity prices to drop&nbsp;<strong>below cash costs to generate supply curtailments&nbsp;<\/strong>as demand losses across the complex are now unprecedented, as Goldman now believes oil use is down an&nbsp;<strong>unprecedented 8 million b\/d:&nbsp;<\/strong><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>Large commitments from core-OPEC for April\/May deliveries pushes the net supply increase near c.3m b\/d, which, when combined with the demand losses, results in an April\/May surplus of 7mb\/d, which will likely breach system capacity during 2Q20.<\/p><\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">As Goldman&#8217;s Jeffrey Currie wrote, &#8220;the system strain creates a physical end, even though when COVID-19 will end is unknown, pushing our forecasts to shut-in economics. We now forecast 3m GSCI -25%.&#8221; As a result of price wars in oil and gas and uncertain policy responses in bulks and base metals, all a direct result of the sharp fall in demand resulting from the COVID-19 containment measures,&nbsp;<strong>Goldman has cut its 2Q Brent price target to just $20\/bbl from $30\/bbl.&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But that was not the worst of it for what little is left of oil bulls.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Outdoing not only Goldman, but virtually every single bearish oil analyst in existence, Mizuho\u2019s Paul Sankey not only estimated that Goldman is too optimistic by half, calculating a whopping 15MM b\/d in oversupply currently, but that&nbsp;<strong>crude prices could go negative &#8211; yes, as in you would be paid to take delivery &#8211; as Saudi and Russian barrels enter the market.&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Oil Plunges To 17 Year Low As One Bank Predicts Negative Prices Late on Tuesday, WTI plunged as low as $26.20 taking out the lows from the 2015\/2016 oil recession, and sending it to a level last seen when US president was George W. Bush, people were listening to Get Busy by Sean Paul and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[376,592,600,4318],"class_list":["post-51821","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-goldman-sachs","tag-oil-price","tag-opec","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51821","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=51821"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51821\/revisions"}],"predecessor-version":[{"id":51822,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/51821\/revisions\/51822"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=51821"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=51821"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=51821"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}