The sharp sell-off is likely a result of growing concerns that supplies would exceed demand in 2019, according to Goldman Sachs.
Key points (Source: Reuters)
- Technical positioning factors are exacerbating volatility.
- Fall in oil prices also reflects low trading liquidity ahead of Thanksgiving, broader cross-commodity and cross-asset sell-off, as growth concerns continue to mount.
- Expects high price volatility until evidence that oil market fundamentals are improving, requiring a decline in OPEC production, signs that demand growth is resilient.
- Recovery in prices will require that the Brent forward curve returns into backwardation from its sudden and significant flattening.
Share
