FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
62,438,666Confirmed
1,456,099Deaths
43,102,713Recovered
Fetching Location Data…
Advertisement
Advertisement
Vladimir Zernov
Crude Oil

Oil Video 17.09.20.

Advertisement

OPEC + Is Set To Discuss The Impact Of Coronavirus

Today, OPEC+ meets to discuss the current state of the market. According to a recent Reuters report, the negative impact of the recent surge in the number of new coronavirus cases in the world will be an important part of this discussion.

Israel will enter a three-week lockdown this Friday while many European countries have started to re-introduce certain virus containment measures.

The main longer-term problem for the oil market is the complete lack of visibility on the jet fuel demand front. Now that many countries are trying to contain the second wave of the virus, it is impossible to tell when air travel will return to normal.

OPEC+ sees this problem but there is nothing it can do about it. In my opinion, additional production cuts are off the table for the foreseable future as OPEC+ members need to restore their budgets that suffered a double blow from the virus and low oil prices.

In this light, OPEC+ will likely stick to a wait-and-see approach until the beginning of 2021. When the world is past the flu season in the Northern Hemisphere, the visibility for oil demand patterns should improve.

OPEC+ Laggards Are In Spotlight Again

During the current crisis, OPEC+ emphasized the importance of full compliance with production cuts. As usual, there were laggards, but compliance was much better compared to OPEC’s previous attempts to support the market with production cuts.

This time, OPEC+ will have to discuss the situation around an unusual laggard. According to IEA, United Arab Emirates (UAE) produced 3.11 million barrels per day (bpd) in August compared to its quota of 2.59 million bpd.

UAE explained that it had to increase production during the summer peak of electricity demand. OPEC+ will now try to force UAE back into compliance.

Also, OPEC+ is set to give other laggards like Iraq and Nigeria more time to make additional cuts in order to compensate for the previous overproduction.

The recent inventory report was bullish for the market, and promises of additional production cuts may provide more support to oil prices. However, it remains to be seen whether WTI oil will manage to stay above the $40 level after U.S. Gulf of Mexico producers bring their barrels back to the market after the passage of Hurricane Sally.

For a look at all of today’s economic events, check out our economic calendar.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US