The bank cut its crude price forecast for 2020 for Brent and West Texas, the US mediator, by $ 12 to $ 31 and $ 28 a barrel, respectively.
“Prices are likely to remain under pressure until the virus-related situation improves,” bank analysts wrote in a note.
Barclays joined other banks in lowering their oil price forecasts based on the collapse of an agreement to curb production between members of the Organization of the Petroleum Exporting Countries (OPEC) and allies, or what is known as OPEC +, as well as demand from the virus.
Barclays also expects the global storage capacity available on the ground to be around 1.5 billion barrels, and it is estimated that the surplus in supplies will exceed five million barrels per day this year, and that it will average ten million barrels per day in the second quarter.
Meanwhile, the bank says, “The US government’s purchases of strategic oil reserves are unlikely to ease the difficulties of the producers.”
He added that the storage capacity available in the strategic petroleum reserve is less than 80 million barrels, according to the US Department of Energy, and this will be equivalent to a flow of less than 0.5 million barrels per day when it is filled over a period of six months, compared to a surplus in supplies of approximately 10 million barrels per day during the second quarter .