• 5 minutes Trump vs. MbS
  • 9 minutes Saudis Threaten Retaliation If Sanctions are Imposed
  • 15 minutes Can the World Survive without Saudi Oil?
  • 7 hours WTI @ $75.75, headed for $64 - 67
  • 1 hour The Dirt on Clean Electric Cars
  • 36 mins Petrol versus EV
  • 5 hours The end of "King Coal" in the Wales
  • 5 hours These are the world’s most competitive economies: US No. 1
  • 33 mins EU to Splash Billions on Battery Factories
  • 1 day Uber IPO Proposals Value Company at $120 Billion
  • 15 hours Saudi-Kuwaiti Talks on Shared Oil Stall Over Chevron
  • 13 hours Closing the circle around Saudi Arabia: Where did Khashoggi disappear?
  • 4 hours E-mopeds
  • 51 mins U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 14 hours Coal remains a major source of power in Europe.
  • 4 hours 10 Incredible Facts about U.S. LNG
Alt Text

Oil Prices Subdued, But For How Long?

Oil prices may have closed…

Alt Text

What’s Next For Oil Prices?

Oil markets will continue to…

Alt Text

Oil Experts Divided As Iran Sanctions Loom

The world’s top oil trading…

Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

Trending Discussions

Oil To Crash Back To $40 If OPEC Fails

Wall St brokers

OPEC’s increasingly probable failure to reach a production freeze deal will see international oil prices plummet back to US$40 a barrel, according to Goldman Sachs analysts. In a note to clients, the experts went further, cautioning that even if the cartel managed to seal a deal, driven by the bearish prospects in a no-deal scenario, its effectiveness will be at best uncertain.

“The lack of progress on implementing production quotas and the growing discord between OPEC producers suggests a declining probability of reaching a deal on November 30,” the analyst team said, noting that while the negotiations were ongoing, OPEC output in October continued to rise, as did the production of non-OPEC mega producers such as Russia.

These developments have greatly diminished the chances of any production freeze leading to a decline in global crude oil supply and a subsequent increase in oil prices over the next seven months.

This is not the first time Goldman has made a very bearish forecast for oil prices. Last year, the investment bank was the first among its peers to warn that oil prices could slump to US$20 a barrel if the glut continued. This is what almost happened in early February this year, when WTI touched lows of US$26 a barrel. Related: Will Oil Majors Ever Recover?

Although this trough was only touched briefly, it certainly rattled markets, and later in the year, it raised doubts among OPEC’s leading producers as to whether their strategy of fighting shale oil with cheaper output was paying off.

As it turns out, it wasn’t, so Saudi Arabia became the initiator of the September talks about a production freeze that was supposed to draw in non-OPEC producers such as Russia, Brazil, Kazakhstan and Azerbaijan, in order to make the effort meaningful.

Yet, Brazil has declared it has no intention of cutting or even freezing its crude oil production, Russia is playing its cards close to its chest, and, what’s more important, the discord within OPEC is growing. If the internal differences of OPEC members are not ironed out by November 30, there won’t be a deal and oil will plunge to greater depths.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


x


Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News