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After four days of intense negotiations, oil producers managed to ink a deal to cut output by an unprecedented amount, strategists at ANZ Bank report.

Key quotes 

“The OPEC+ alliance was brought back from the dead and agreed to cut output by 9.7mb/d. This amounts to a 23% reduction in output by these members.”

“This should help support prices in the short term, and it significantly reduces the risk of prices dropping into the teens as it officially ends the price war that Saudi Arabia and Russia started only a month ago.”

“Crude oil futures will likely find some stability on this news this week. But we suspect any rally will be relatively short lived, as the reality of the situation dawns on traders. The market is awash with crude and we are likely to see inventories continue to rise in coming months.”