Morgan Stanley Investment Bank has cut its forecast on oil price, and demand due to the spread of a new coronavirus caused a 60-70% decline in passenger transportation through railway and air transport.
Report informs citing Interfax that according to the bank, overgrowth in oil will be 300,000 barrels per day in 2020. Forecast on oil demand dropped by 15% to 850,000 barrels.
Currently, the experts hope that Brent crude price will be $55 a barrel (previous forecast - $65.7) in the first quarter, $57 a barrel (previously - $65) in the second quarter.
WTI crude price is forecasted to fall $62 a barrel to $50 a barrel in the first quarter, from $60 to $52.5 a barrel in the second quarter.
'We expect OPEC+ participants to extend the current deal up to the end of 2020 and undertake more than 600,000 barrels cut for the rest of the first half of the year', Bloomberg says, citing Morgan Stanley's report.
Analysts say output in Brazil, Norway, Guyana, and Canada will increase. This means that the supply from non-OPEC countries will increase by about 1.9 million barrels in 2020.