A bit excessive? Oil traders have priced in a three-month halt to global air travel, says Goldman Sachs

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Japan, Israel and Morocco have banned international travel in the face of the discovery of a new, perhaps more contagious form of the coronavirus.

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But the oil market has greatly reduced air travel. According to Goldman Sachs strategists, with no offsetting reaction in production from the OPEC+ oil cartel, the market set the price for what they say 7 million barrels of oil a day, with demand slumping over the next three months Is.

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This equals, say analysts led by Damien Courvalin, “not a single plane flying around the world for three months.” That’s the equivalent of a lockdown half as of the second quarter of 2020, shortly after the new coronavirus, which causes COVID-19, began affecting countries outside China for the first time.

Not surprisingly, these analysts consider the feedback excessive. He is of the view that a new version, with a global release of reserves, represents only $5 a barrel, below his $85 forecast for the next few months.

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“Indeed, there is still the possibility of offsetting the accelerated growth through a lack of progress in the Iranian talks (where we had expected a supply pick-up starting in 2Q22). A month after OPEC+ met on Thursday. as well as the current ramp-up in gas-to-oil replacement could actually offset almost half of the combined negative hit of this new COVID variant and SPR release scenario,” he said. said.

Crude Futures CL.1,
+4.08%
They rose by about $3 a barrel on Wednesday morning but were still trading below $70, after trading as high as $84.97 earlier in the month.

natural gas futures ng00,
-3.66%,
In contrast, 4% fell.

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