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The decision by OPEC+, a group of 24 nations led by Saudi Arabia and Russia, to cut the oil output by 9.7 million barrels per day, would put a floor under prices at best, according to analysts at BNP Paribas. 

Oil benchmarks – West Texas Intermediate (WTI) and Brent – are trading in the green at press time. While a barrel of WTI is changing hands at $24.00, representing a 5.4% rise on the day, Brent is trading at $32.88, up 4.45% on the day. 

“After an initial positive reaction in oil prices, we expect the OPEC+ decision at best to establish a floor under the market,” said BNP analysts. 

Key quotes

We do not expect a sustained recovery in the oil price until pent-up demand is released in the third quarter. 

Hedges from producers are likely to cap upside in prices.