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Analysts at UBS argue that oil prices are set to end 2020 lower, with their WTI Q4 price forecast is $31/ barrel.

Key quotes

“The 6 June OPEC+ meeting agreed on a first phase extension by a month to July. 

Recent additional cuts of ~1.2Mbd from Saudi/UAE/Kuwait/Oman will not extend.

Tone on compliance is harder.

Past 2-3 months has been the rapid fall in US production.

Oil price rebound likely prompts some of this production back in coming months and next OPEC+ meeting scheduled for 1 December. 

Monthly JMMC meetings will monitor market developments and OPEC+ compliance behavior, which has helped with the price rebound. 

Full recovery will need continued supply discipline, but also demand recovery plus time to work off inventories and spare capacity.”

Expert score

5

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