Crude prices have been one of the biggest talking points in 2020. Crude oil futures climbed nearly 3 percent on Tuesday in light trading as the Trump administration launched an effort to work with Saudi Arabia to stabilise oil prices.

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Jeff Brown, president of Facts Global Energy discussed this and the outlook going ahead with CNBC-TV18's Manisha Gupta.

From a demand perspective, there has been a major slowdown and Brown believes that a further slip is probable.

"February is down about 8 million barrels a day – China is recovering a bit, but now we see Europe, we see the US, all going into the shutdown mode. When you go into the shutdown mode, you can lose about 20-30 percent of your demand. That is the high side. So until we see a change to that picture, oil is going to stay in the doldrums and if that pressure should stay on, we think it would even go down to the teens," Brown said.

When asked what will be the worst-case scenario, Brown replied, “If you look at the numbers in terms of the bill that we have going on right now, we have never seen anything like it. We can see these day-to-day moves on the market where we get a little more optimistic, a little more pessimistic but the simple fact is – when you look at the supply right at the front of the market, there is way too much going in right now.”

In terms of prices, he added, “We always see WTI trades lower than Brent. Brent is the one that we focus on the most, we would have that one going down below USD 20 per barrel. Currently, we have it in the upper teens at the low but I have to tell you once we drop to those levels, we could test lows like we have seen in the past or frankly even go into single digits if we keep like this.”

Speaking about the US intervening in the price war between Saudi Arabia and Russia, he further mentioned, “There is talk around this. We think it is unlikely to happen that the US will get together at the end of the day with the Saudis.”

“In terms of the impact on renewables and other areas, every time the oil price goes down, some of the excitement around alternative energy does pull back. We have seen that several times in the past. I think renewables are pretty much – they are riding on their own horse now to some extent. They will keep moving forward,” he added.

First Published:Mar 24, 2020 2:57 PM IST