Home
Register
AFP – Oil prices rose Monday after top producers agreed to massive output cuts, but gains were capped as doubts grew about whether the move was enough to stabilise coronavirus-ravaged energy markets.
US benchmark West Texas Intermediate was up about five percent at $23.94 a barrel in Asian afternoon trade, after earlier rallying almost eight percent.
Brent crude, the international benchmark, also fell slightly from an earlier strong rally to trade 4.2 percent higher at $32.83 a barrel.
While the rises were healthy, they were limited compared to the double-digit jumps and falls of recent weeks, with analysts concerned there will be still be massive oversupply in the market as the virus pandemic throttles demand.
OPEC producers dominated by Saudi Arabia and allies led by Russia thrashed out a compromise deal Sunday after Mexico had balked at an earlier agreement struck on Friday.
The videoconference summit agreed to a cut of 9.7 million barrels per day from May, according to Mexican Energy Minister Rocio Nahle, down slightly from 10 million barrel reduction envisioned earlier.
OPEC Secretary General Mohammad Barkindo called the cuts “historic” — and the agreement appeared to mark an end to a bitter price war between Riyadh and Moscow.
Oil markets have been in turmoil for weeks as lockdowns and travel restrictions imposed to combat the outbreak batter demand, while the Saudi-Russian row compounded the crisis.
But analysts were left disappointed at a cut that will go nowhere near to making up for the expected demand loss due to the pandemic, forecast at anywhere between 15 and 30 million barrels a day.
Storage tanks worldwide are also rapidly filling up.
“The deal is a little less than the market expected,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, told Bloomberg News.
“The hard work lies ahead given that the market is very sceptical that OPEC+ are actually going to be able to come up with their near 10 million barrels a day of production cuts.”
AxiCorp’s Stephen Innes added: “There remain concerns the agreement could be a day late and a ‘barrel short’ to prevent a decline in prices in the coming weeks as storage capacity brims”.
US benchmark West Texas Intermediate was up about five percent at $23.94 a barrel in Asian afternoon trade, after earlier rallying almost eight percent.
Brent crude, the international benchmark, also fell slightly from an earlier strong rally to trade 4.2 percent higher at $32.83 a barrel.
While the rises were healthy, they were limited compared to the double-digit jumps and falls of recent weeks, with analysts concerned there will be still be massive oversupply in the market as the virus pandemic throttles demand.
OPEC producers dominated by Saudi Arabia and allies led by Russia thrashed out a compromise deal Sunday after Mexico had balked at an earlier agreement struck on Friday.
The videoconference summit agreed to a cut of 9.7 million barrels per day from May, according to Mexican Energy Minister Rocio Nahle, down slightly from 10 million barrel reduction envisioned earlier.
OPEC Secretary General Mohammad Barkindo called the cuts “historic” — and the agreement appeared to mark an end to a bitter price war between Riyadh and Moscow.
Oil markets have been in turmoil for weeks as lockdowns and travel restrictions imposed to combat the outbreak batter demand, while the Saudi-Russian row compounded the crisis.
But analysts were left disappointed at a cut that will go nowhere near to making up for the expected demand loss due to the pandemic, forecast at anywhere between 15 and 30 million barrels a day.
Storage tanks worldwide are also rapidly filling up.
“The deal is a little less than the market expected,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, told Bloomberg News.
“The hard work lies ahead given that the market is very sceptical that OPEC+ are actually going to be able to come up with their near 10 million barrels a day of production cuts.”
AxiCorp’s Stephen Innes added: “There remain concerns the agreement could be a day late and a ‘barrel short’ to prevent a decline in prices in the coming weeks as storage capacity brims”.
» CCS.N0000 ( Ceylon Cold Stores)
» Sri Lanka plans to allow tourists from August, no mandatory quarantine
» When Will It Be Safe To Invest In The Stock Market Again?
» Dividend Announcements
» MAINTENANCE NOTICE / නඩත්තු දැනුම්දීම
» ඩොලර් මිලියනයක මුදල් සම්මානයක් සහ “ෆීල්ඩ්ස් පදක්කම” පිළිගැනීම ප්රතික්ෂේප කළ ගණිතඥයා
» SEYB.N0000 (Seylan Bank PLC)
» Here's what blind prophet Baba Vanga predicted for 2016 and beyond: It's not good
» The Korean Way !
» In the Meantime Within Our Shores!
» What is Known as Dementia?
» SRI LANKA TELECOM PLC (SLTL.N0000)
» THE LANKA HOSPITALS CORPORATION PLC (LHCL.N0000)
» Equinox ( වසන්ත විෂුවය ) !
» COMB.N0000 (Commercial Bank of Ceylon PLC)
» REXP.N0000 (Richard Pieris Exports PLC)
» RICH.N0000 (Richard Pieris and Company PLC)
» Do You Have Computer Vision Syndrome?
» LAXAPANA BATTERIES PLC (LITE.N0000)
» What a Bank Run ?
» 104 Technical trading experiments by HUNTER
» GLAS.N0000 (Piramal Glass Ceylon PLC)
» Cboe Volatility Index
» AHPL.N0000
» TJL.N0000 (Tee Jey Lanka PLC.)
» CTBL.N0000 ( CEYLON TEA BROKERS PLC)
» COMMERCIAL DEVELOPMENT COMPANY PLC (COMD. N.0000))
» Bitcoin and Cryptocurrency
» CSD.N0000 (Seylan Developments PLC)
» PLC.N0000 (People's Leasing and Finance PLC)
» Bakery Products ?
» NTB.N0000 (Nations Trust Bank PLC)
» Going South
» When Seagulls Follow the Trawler
» Re-activating
» අපි තමයි හොඳටම කරේ !
» මේ අර් බුධය කිසිසේත්ම මා විසින් නිර්මාණය කල එකක් නොවේ
» SAMP.N0000 (Sampath Bank PLC)
» APLA.N0000 (ACL Plastics PLC)
» AVOID FALLING INTO ALLURING WEEKEND FAMILY PACKAGES.
» Banks, Finance & Insurance Sector Chart
» VPEL.N0000 (Vallibel Power Erathna PLC)
» DEADLY COCKTAIL OF ISLAND MENTALITY AND PARANOID PERSONALITY DISORDER MIX.
» WATA - Watawala
» KFP.N0000(Keels Food Products PLC)
» Capital Trust Broker in difficulty?
» IS PIRATING INTELLECTUAL PROPERTY A BOON OR BANE?
» What Industry Would You Choose to Focus?
» Should I Stick Around, or Should I Follow Others' Lead?