Goldman Sachs, an American investment bank and the financial company have predicted a slash in the prices of crude oil. This prediction was announced on Tuesday, 17th of March 2020. Goldman Sachs group predict that the oil price will fall by about 32% to $20 per barrel by July.
The slash in crude oil prices could wipe out about 50% of Nigeria’s revenue thrusting the economy back into another recession after the country’s economy recently came out of a recession.
There has been a major decline in the demand for crude oil since the COVID 19 virus became a worldwide pandemic and in addition, the price war between Saudi Arabia and Russia.
Reports say that Saudi Arabia needs to sell crude oil at a minimum of about $82 per barrel to balance its economic budget and Russia reportedly does not need to sell crude oil for more than $42 per barrel to balance its economic budget.
Last week Monday, 9th of March 2020, Brent Crude recorded its biggest one-day price fall in crude oil since 1991.
Jeffrey Currie, Goldman Sachs’ global head of commodity research, said that demand losses are now unprecedented. The company said that the use of crude oil has dropped by eight million barrels per day due to the COVID 19 virus outbreak, which has led to a fall in demand for airline travel.
Turkish airline has currently suspended all its flights. Many countries have banned travel, several countries in Europe are now on lockdown, especially in Italy. Before the COVID 19 virus lockdown in the country, Italy alone consumed about 1,236,628 barrels of crude oil daily. After the lockdown, the number has seen a significant decline.
