The Massive Oil Demand Shock
- Global oil demand could plummet by 18.7 million bpd in April, deepening an expected demand plunge of 10.5 million bpd for March, Goldman Sachs said, while the coronavirus pandemic continues to claim thousands of lives and forces a growing number of major economies into lockdown.
- “A demand shock of this magnitude will overwhelm any supply response including any potential core-Organization of the Petroleum Exporting Countries output freeze or cut,” Goldman Sachs said in a note this week, as carried by Reuters.
- According to the investment bank, such a demand shock would need several million barrels of oil per day taken off the market.
- Goldman Sachs’s view about demand destruction is echoed by the world’s largest independent oil trader, Vitol, as analysts and trading houses race to reduce their demand outlooks and oil price forecasts by the week.