“Oil prices have plunged despite the China demand boom given banking stress, recession fears, and an exodus of investor flows,” the bank said in a March 18 note. “Historically, after such scarring events, positioning and prices recover only gradually, especially long-dated prices.”
Global markets have been roiled this week as turmoil at Credit Suisse Group AG triggered panic across markets. Oil has slumped to a 15-month low, with Brent dropping 12% this week to below US$73 a barrel.
Following the decline in prices, the bank now expects OPEC producers to only increase output in the third quarter of 2024, versus in the second half of 2023 which Goldman had estimated before the price rout.
