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An agreement was finally struck on Sunday afternoon to address the collapse of oil demand due to the pandemic, strategists at TD Securities report.

Key quotes 

“OPEC+ has committed to cut 9.7 million b/d between May and June; 8 million between July and December; 6 million from January 2021 to April 2022.”

“We project demand to decline by roughly 6.5 million b/d in 2020. Given that most of the shock will occur in Q2, our model predicts a surplus of some 9.7 million b/d despite the aggressive historic supply cut agreement.”

“We are still comfortable with our estimate that WTI is unlikely to trade north of $30/bbl and $39/bbl for Brent. In fact, we are projecting a mid-$20s price for WTI (near $30 for Brent) during Q2.”