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Oil markets are expected to remain volatile as the market contemplates the new production cut agreement, in the opinion of strategists at ANZ Bank.

Key quotes 

“The final 9.7mb/d cut in output is still the biggest coordinated supply agreement the market has ever seen. G20 producers also agreed to reduce output; however, they failed to set any individual targets.” 

“An end to the price war and this resultant supply agreement should support prices in the short-term.”

“However, it fails to completely fill the hole left by the hit in demand from COVID-19. This should see prices remain depressed as inventories continue to rise in coming months.”