OPEC+ could be extending current oil output cuts for 1-2 months
|Energy Intelligence reports of a source that has said Opec+ will discuss extending the current 9.7 million bpd cuts for 1-2 months.
"Opec-plus could meet on Jun. 4 to decide on a market management policy that might extend the current production cut pact by up to two months."
Market implications
Inventory levels are on the increase pertaining to a surge in US crude oil imports, particularly from Saudi Arabia. This news was serving to cap the recent rally in prompt prices. "But, it is worth noting the surge in imports is likely a temporary phenomenon as the shipments were sent before OPEC+ came to their historic production cut deal," analysts at TD Securities explained.
With that said, and as demand continues to normalize, we continue to expect crude fundamentals will remain on a tighter path throughout the summer. This will see inventory builds make way for draws, and support our long WTI Dec20-Dec21 spread.
Extensions will only go to serve as further fuell to the bid.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.