Search ForexCrunch

With the collapse of the OPEC+ production cut agreement, the oil market is facing a shock to both demand and supply. Floating storage levels are already increasing, while tanker rates are rising, strategists at ANZ Research apprise.

Key quotes

“Saudi Arabia has more than 2mb/d of spare capacity. We expect its output to push above 12mb/d in Q2.” 

“We expect US oil production to fall, as the industry battens down the hatches to weather the expected price war.”

“We estimate pandemic-related demand losses of 1.6mb/d in H1 2020. That said, lower prices and resuming business activities will see a strong rebound in demand in 2H 2020.” 

“The supply increase from OPEC+ nations is more concerning. Should the price war worsen, we see a risk to the oil price.”

 

Expert score

5

Etoro - Best For Beginner & Experts

  • 0% Commission and No stamp Duty
  • Regulated by US,UK & International Stock
  • Copy Successfull Traders
Your capital is at risk.