Oil could drop $3 if virus plays out like SARS – Goldman Sachs

Dhwani Mehta FXStreet

The US investment banking giant, Goldman Sachs, assesses the impact of a potential SARS-like epidemic on oil markets.

Key Quotes:

“The virus that originated in Wuhan could result in global demand falling by 260,000 barrels a day in 2020, with jet fuel accounting for around two-thirds of the loss.

That would probably lead to a $2.90 a barrel drop in oil prices. The bank’s projections translate the estimated SARS demand impact into 2020 volumes.

While an OPEC supply response could limit the fundamental impact from such a demand shock, the initial uncertainty on the potential scope of the epidemic could lead to a larger price sell-off than fundamentals suggest.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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