Goldman Sachs lowered its Brent price outlook, saying OPEC+ output cuts and interest rate reductions by central banks would not be enough to stem a large inventory build up caused by declining demand from the coronavirus outbreak.

Brent prices could fall to $45 per barrel in April, from an earlier estimate of $53, before gradually recovering to $60 by year-end, the Wall Street bank said in a note on Tuesday. In its second downward revision in less than a month, the bank lowered its third- and fourth-quarter Brent price forecasts to $53 and $59 a barrel respectively, from $60 and $65 previously.

Oil prices rose on Wednesday after a panel of the Organisation of Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, recommended cutting oil output by an extra 1 million barrels per day (bpd) on Tuesday. “While such cuts will help normalize oil demand and inventories later this year, they can't prevent an already started large oil inventory accumulation,” the bank said.

The Goldman analysts also lowered their 2020 demand forecast to show that consumption will contract by 150,000 bpd from a year earlier, the lowest growth rate since the 2008 financial crisis. It earlier forecast growth of 550,000 bpd.

Goldman Sachs said given its demand forecast, current spot prices are already pricing in a 2 million bpd production cut by OPEC in the second quarter of 2020. “It will take sustained curtailed OPEC+ production - rather than global synchronized rate cuts - to help prices gradually recover from April onwards,” analysts at the bank said.

The fast-spreading coronavirus has infected almost 91,000 people globally, of which more than 80,000 are in China.

Other banks have also slashed their oil price forecasts recently, including the Bank of America (BofA) Global Research, Morgan Stanley and Standard Chartered, as the virus threatens global demand for oil.

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