The numbers of the production cut agreed by the OPEC+ are unprecedented but falls short of expectations, in the opinion of strategists at OCBC Bank.
Key quotes
“OPEC+ has decided on an output cut of 9.7mbpd in May and June, 7.7mbpd in 2H 2020 and 5.8mbpd in Jan-Apr 2021.”
“Overall, the market appears to have already priced in the cuts and might be somewhat disappointed with the depth of cuts.”
“There appears to be a stabilisation in crude prices in the past week in the range of $30-$35/bbl, and we think prices are likely to stay in the sub-$30 level for now.”
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