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Special Market Report

2020 Unleashes Unprecedented Volatility on Global Crude Markets

Global economic activity is falling at a near-record rate as countries take action to prevent the spread of COVID-19. Simultaneously the OPEC and Russia curtailment agreement falls apart as Russia abandons the willingness to cut production. This has created unprecedented volatility in the global crude market.

Download Sproule’s special market report to get insights into where we may be headed.

Report Highlights

  • The near-term impact of both COVID-19 and the Saudi-Russia oversupply tactics will be significant, and we are expecting a period of heightened market volatility and low global crude prices.
  • For 2020, we see WTI prices landing within an extensive range, from as low as $10 US/ bbl to the mid-$40’s or above by year-end. This emphasizes how scenario-dependent the price of crude will be in the coming months given the unique scenario crude markets are currently in, with prices being hit on both sides of the supply-demand equation.
  • Longer-term, we do know that current spot prices are materially below the marginal cost of supply in a world consuming roughly 100 million bbl/d of crude, which tells us that current prices are not sustainable.
  • Substantial supply rationalization to match demand will be needed for stability to return in a rebalanced market. Sproule will continue to monitor the situation and adjust our price forecasts with both the near-term volatility as well as long-term market fundamentals in mind.

 

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