Oil derivative traders are preparing for crude prices to fall further in the coming months, but few expect Goldman Sachs’ worst-case scenario of a drop to $20 a barrel to happen any time soon.
Oil derivative traders are preparing for crude prices to fall further in the coming months, but few expect Goldman Sachs’ worst-case scenario of a drop to $20 a barrel to happen any time soon.
The options market indicates investors are braced for US crude prices to drop to around $35 in the first half of 2016, but most do not expect a steeper plunge in that period.
US crude futures fell below $37 a barrel for the first time since early 2009 on Tuesday after Opec’s most recent policy meeting resulted in acrimony and no decision to cut output.
Goldman Sachs has said prices could drop as low as $20 a barrel at some point, hit by a growing global crude glut and sluggish dem-and. Crude oil futures have not traded around that level for any length of time since the late 1990s and the options market suggests few bel-ieve prices will return there in 2016.
