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ABN AMRO’s oil price forecast has been revised lower again due to coronavirus-related measures and a much bigger oil demand shock while high build of inventories will cap much of the upside potential for oil prices.

Key quotes

“We see a sharp drop in global demand. This is leading to higher inventories. The impact on supply will come with a delay. This combination will keep oil prices under pressure and cap upside potential.”

“Our Q2 forecast is similar to the 2016 lows. Further downside could be seen, but will be temporary. In line with the economic recovery in H2, oil prices are expected to recover in H2 as well.” 

“Due to oversupply and even bigger inventories, the upside potential may be limited to USD 50/bbl in 2021.”