Market News & Analysis
Sentiment Struggles Amid Concerns of 2nd Wave of Infections
Fiona Cincotta May 12, 2020 7:38 AM
Whilst fears of a second wave of infections are causing some unease in the markets, oil prices are a rare source of light. Oil has jumped over 1.2% in early trade following an unexpected commitment from Saudi Arabia to cut oil production to drain some of the global oil glut. A bullish production cut of 1 million barrels per day by Saudi Arabia means that the oil producing giant has cut production by some 40% since April. The move could also go a long way to encourage other OPEC nations to comply with their cut quotas.
Whilst the cut was overshadowed in the previous session by fears of a second wave of infection, data showing that oil storage had dropped in the US’s largest oil storage at Cushing, Okla, by 2.17 million barrels offers some breathing space amid swirling storage shortage fears.
With supply now being addressed and demand slowly picking up as economies reopen, the worst appears to be behind us. API data will be in focus. Last week’s data showed a rise of 8.4 million barrels.
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