- Crude oil could drop below $20/bbl, but the oil slump does not seem likely to derail the global economy, Goldman Sachs predicts, in a bearish view that coincides with the latest report from the IEA.
- With capacity to store oil exhausted in some places, prices may need to drop low enough to halt crude output that can no longer be stockpiled, says Jeff Currie, Goldman’s head of commodities research.
- The storage sites most likely to run out of space are "landlocked,” such as Cushing, Okla., where inventories reached 64.2M barrels in the week to Jan. 15, the highest in data from the Energy Department that extend back to 2004.
- The IEA says the global oil surplus will be bigger than previously estimated, increasing the risk of further price losses, as Iran and Iraq boost production while demand growth slows.
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