After the Sharp Drop in Prices, What’s Next for Oil?

10 MAR 2020
TOPIC: COVID-19

The oil price war that contributed to the recent stock market plummet represents a structural shift in the energy market that will have lasting repercussions for producers around the globe, says Goldman Sachs Research’s Jeff Currie. Saudi Arabia’s decision to slash prices marks a return to what Currie has called the New Oil Order, where low-cost producers increase supply from their spare capacity to force higher-cost producers to reduce output. With the coronavirus dragging down oil demand, the move to grab market share will hit US shale producers at a time when they are already facing pressure on their balance sheets. The open question is whether it will be enough to force a restructuring of the industry to better align capacity with the long-term demand. 

Download Transcript

SUBSCRIBE ON APPLE PODCASTS

 

 

This podcast was recorded on March 10, 2020. 

 

This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this recording was obtained from publicly available sources, has not been independently verified by Goldman Sachs, may not be current, and Goldman Sachs has no obligation to provide any updates or changes. All price references and market forecasts are as of the date of recording. This podcast is not a product of Goldman Sachs Global Investment Research and the information contained in this podcast is not financial research. The views and opinions expressed in this podcast are not necessarily those of Goldman Sachs and may differ from the views and opinions of other departments or divisions of Goldman Sachs and its affiliates. Goldman Sachs is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this podcast. The information contained in this podcast does not constitute investment advice or an offer to buy or sell securities from any Goldman Sachs entity to the listener and should not be relied upon to evaluate any potential transaction. In addition, the receipt of this podcast by any listener is not to be taken to constitute such person a client of any Goldman Sachs entity. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefore (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed.

 

Copyright 2020 Goldman Sachs & Co. LLC. All rights reserved.

Explore More Insights