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A more than half a million barrels per day (bpd) cut agreed by the OPEC technical committee will remove some downtrend strain but is not seen as bullish in the opinion of analysts at TD Securities.

Key quotes

“OPEC’s technical committee decided on a 600k bpd cut recommendation after an extra day of talks, but Russia is still reluctant, wanting more time to assess the impact of the virus.”

“This amount of cut, along with support from Libyan and Iraqi disruptions, may be enough to prevent a major rout but it is unlikely to be seen as bullish by the market with numbers closer to 1m bpd being referenced given the severity of the demand hit.”

“The completion of a CTA selling program will remove some downward pressure in WTI crude going forward, but we expect algos to play catch-up in Brent crude and gasoline.”