OPEC+ decision would put a floor under oil prices - BNP Paribas

Omkar Godbole FXStreet Contributor

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.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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