OPEC further reduced production
Investors' concerns about oil demand are linked to tighter restrictions due to the coronavirus in Europe, which could hold back the region's economic recovery. Nevertheless, analysts still call the correction local and do not expect a collapse in prices below $55 per barrel against the background of the actions of the OPEC+ countries.
The International Energy Agency, in a mid-term report on the oil market published earlier this week, was skeptical and cool about the view that the market has entered a stage of long and steady price growth. The reason for the overheating of the market, experts unanimously call the policy of OPEC+ due to the rejection of the plan to ease production restrictions. Instead, the cartel has further reduced the production of oil. Against the background of a shortage of supply, oil has become more expensive all this time. The quotes will continue to depend on the actions of OPEC+. The next meeting of the alliance countries, where production levels for May will be determined, will take place on April 1. If OPEC+ adheres to the strategy of increased production cuts throughout the second quarter, then a large deficit may form in the market. This will be enough for prices to rise to $70 per barrel. Most experts agree that there will be no deep drawdown of prices against the background of the deficit.