InvestorQ : Why are oil prices rallying at this point? Do you see the OPEC cutting supplies of oil in the near future?
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Why are oil prices rallying at this point? Do you see the OPEC cutting supplies of oil in the near future?

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8 months ago
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The oil prices appear to have finally found a bottom after falling vertically by more than 60% in less than two months. This is despite the fact that oil demand has fallen sharply by 30% in the midst of the lockdown in March. The actual fall would have been much steeper had it not been for aggressive storage demand by countries at lower prices. However, oil prices have stabilized and again rose from lower levels. The bounce in oil prices is on the back of hopes that the OPEC and Russia would get together to cut supplies more aggressively and support prices. It is now being expected that the OPEC / Russia could end up cutting supplies by 10 million bpd to as high as 15 million bpd; a substantial dent on supply. That should help prices stabilize although any sharp rise in demand would still predicate on robust demand.

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