InvestorQ : How do you see oil prices moving from here? Will the supply cut help prices of oil to move higher?
Juvina Maggie made post

How do you see oil prices moving from here? Will the supply cut help prices of oil to move higher?

Answer
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Angel dcosta answered.
6 months ago


Despite the sharp supply cut, the oil market continues to be a hard battle between supply and demand. Oil prices in the Brent market have bounced back after touching a low of $22/bbl to $32/bbl. The 10 million bpd production cut agreed to by the largest oil producers hardly appeared to have impact as prices ended lower. The 10 million bpd supply cut is the largest ever supply cut attempted and would have been sufficient to push up prices in normal circumstances. However, demand has fallen by over 20% in most countries like India, China and Japan. Hence, the impact on the price is expected to be limited. Of course, once the demand picks up, then this move may start to yield dividends to oil producers.