When oil production began at the 120,000 bpd Liza Phase 1 Development offshore Guyana on December 20, Brent was trading at US$66.14 per barrel. Now, less than three months later, the price has collapsed to US$36.98.
In one of the most dramatic bouts of selling ever, Brent futures sunk by 31% in a matter of seconds after the open of trading in Asia on Monday after already suffering their biggest loss since the global financial crisis at the end of last week, according to a Bloomberg report.
Morgan Stanley has cut its 2020 oil demand growth outlook to 500,000 barrels per day (bpd) from 800,000 bpd. It lowered its second-quarter 2020 Brent LCOc1 price forecast to $55 per barrel from $57.5 and cut its U.S. West Texas Intermediate CLc1 outlook to $50 from $52.5.
Rystad Energy now expects more than half of global oil demand growth to be lost in 2020. The impact on demand growth has been staggering, if not unprecedented, with February’s crude demand dropping by a shocking 4.6 million barrels per day (bpd), led by a 2.9 million bpd month-on-month drop in Chinese crude runs.
Rystad Energy’s pre-coronavirus global oil growth estimate was 1.1 million bpd for 2020, which it later slashed by 25% last month.
The Norway-based independent energy research and business intelligence company sees supply continuing to surge in countries that are not bound by any production quotas – namely in the US, Brazil, Norway, and Guyana.
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