At the moment, there are no shortage of forecasts to pick from as to how low it may eventually go. Goldman Sachs thinks Brent crude will fall to $42 in April-June; Morgan Stanley predicts a worst-case scenario of $43 per barrel in 2015 and even the once near-impossible scenario of $20 per barrel oil is now attracting attention from traders.
The one thing that most agree on, however, is that this will be a crucial few weeks for black gold. Here, we take a look at some of the difficulties in calling just how far oil prices will fall. In 2008, the last major period when oil fell at a similar rate, prices fell from $146 per barrel in July to $36 per barrel in December.
However, Neil Atkinson, head of analysis at Lloyd’s List Intelligence, pointed out to CNBC, that during this period global demand was falling 0.6 million barrels a day and the market was supported by falling supply from non-OPEC countries.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.