Oil traders are not convinced by OPEC+ deal
Major crude oil indexes have returned to the red on April 13. Recent gains have been negated by the doubtful sentiments of the traders.
Bent crude futures have lost 26 cents - 0.8% - and ended up at US$31.22 at 1020 GMT. WTI crude remained flat at US$22.76. going in and out of the green.
Earlier OPEC+, Russia and other major oil producers have managed to reach compromise after four days of negotiations. The countries have developed a plan to cut the global output by 9.7 million bpd this May, effectivelt taking out 10% of the supply. Initially, Misco opposed the deal, yet was convinced a day later. UAE, Kuwait and Saudi Arabia have even offered to make deeper cuts, reducing the output by 12.5 million barrels per day.
Nevertheless, some experts have expressed their doubts over the deal’s efficiency. Analysts are not convinced, that the producers will actually follow the plan. And even if the producers comply in full, traders are still concerned about the falling demand. At the moment the oil consumption have been reduced by 30% because of the coronavirus pandemic.
Harry Tchilinguirian, Head of Commodity Research at BNP Paribas. has stated that OEC+ deal is simply establishing a “floor under the market”. He also does not expect a full rebound of the market until the third quarter of 2020.