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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.”

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