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Energy markets could be in for a rude awakening without a significant OPEC response in the opinion of economists at TD Securities. Brent is trading at $55.260.

Key quotes 

“Improved cracks and extremely low crude prices had prompted some independent refiners to load up on cargoes for Q2 delivery, implying the worst of the demand shock may have been seen in China.” 

“As contagion spreads outside of China, the risk to demand is still tilted to the downside.” 

“This suggests that before energy markets can make a sustainable move higher, a more aggressive OPEC+ response is going to be needed at the March meeting, and thus far Russia is seemingly reluctant to participate in further curtailments — which is raising fears of an OPEC+ break-up.” 

“In the near-term, we expect CTAs to add selling pressure to Brent in response to strengthening downside momentum.”