Expectations of oil decline to below $ 40 a barrel economy

The American Goldman Sachs Group expected that the price of Brent crude barrel would decrease below $ 40 a barrel in light of the “extremist” scenario with the burning of the trade war and the increase in supplies.

This comes after the group reduced its expectations for oil prices twice in a week.

Bloomberg quoted a memorandum of the group analysts, including Yulia Gregsby, what they wrote from “a more extreme and less likely scenario, with the slowdown in Global GDP and the full retreat of OPEC Plus’s alliance discounts, which may control the supply of non -member states in OPEC, we expect that the price of Brent crude will decrease to less than $ 40 per barrel in late 2026”.

This opinion does not represent the current basic expectations of the bank, which expects the price of Brent crude to reach $ 55 in December.

Fluctuations

The global oil market has witnessed severe fluctuations in the last sessions, as the escalation of US President Donald Trump’s administration to the trade war after imposing customs duties on dozens of countries, in addition to the reactions of some other economies, including China, increased the risk of stagnation and challenges in the level of energy consumption, and at the same time, “OPEC Plus” witnessed a shift, as it added more barrels to what was expected after a long time after controlling supply.

Meanwhile, banks, including Goldman Sachs, Morgan Stanley and Sosete General, have reduced their basic expectations, as well as exploring low and bullous results, and this is a common practice among basic commodity monitors when studying scenarios under various circumstances.

Assuming a “typical” economic recession in the United States, in addition to basic expectations for supplies, Brent crude is expected to reach $ 58 a barrel in December, and $ 50 a month next year, according to Goldman analysts in a note entitled “To what extent can oil prices decrease?”.

In today’s dealings in global markets, the price of Brent crude barrel in the latest transactions reached $ 65 a barrel.

Brent had reached its lowest level in 4 years yesterday, Monday, affected by the escalation of global trade tensions when it reached the level of $ 64.8 a barrel.