An oil supply surge from the Organization of the Petroleum Exporting Countries and other producers could overwhelm global storage as the coronavirus squeezes demand, pushing prices below $20 a barrel, Bank of America Global Research said on Wednesday.
Oil prices have tumbled to below $30 a barrel in March due to the impact of the virus and a push by Saudi Arabia and Russia to ramp up output after the collapse of a deal between OPEC and its allies, known as OPEC+, to curb supply.
Flood in market
“(Around) 4 million barrels per day (mbpd) of new OPEC+ supply could arrive in the next two months,” BoFA said, adding global consumption could contract by over 0.5 mbpd in the first half of 2020, with the situation likely spilling over into the second half if the virus outbreak is not contained.
