Pandem­ic will lead to leaner, strong­er oil indust­ry but raise risk of shorta­gesWASHINGTON: The coronavirus pandemic and resulting plunge in crude prices will result in a leaner, stronger oil industry but raise the risk of shortages further down the line, Goldman Sachs analysts said on Monday. Crude prices suffered another sharp fall on Monday as the pandemic worsened and the Saudi Arabia-Russia price war showed no signs of abating. “If pipelines get clogged up as refineries shut down, inventories cannot build, reducing the cushion and creating a very quick risk reversal towards oil shortages,” Goldman said in a note. This would, in turn, cause an oil shortage, pushing prices above the Wall Street bank’s $55-a-barrel target for 2021, it said. “Paradoxically, this will ultimately create an inflationary oil supply shock of historic proportions because so much oil production will be forced to be shut in,” it added.

Source: The Express Tribune March 30, 2020 13:07 UTC