WTI Crude Oil Continues to Climb Higher as OPEC+ Supply Cuts Kick In - Forex News by FX Leaders
WTI Crude Oil Continues to Climb Higher as OPEC+ Supply Cuts Kick In

WTI Crude Oil Continues to Climb Higher as OPEC+ Supply Cuts Kick In

Posted Friday, May 1, 2020 by
Arslan Butt • 1 min read

WTI crude oil prices continue to trade bullish into Friday as markets remain optimistic about the less than anticipated build-up in US crude inventories over the previous week and as OPEC+ starts cutting production this month. At the time of writing, WTI crude oil is trading at around $19.57 per barrel.

WTI crude oil contracts for June jumped 25% higher over the previous session as traders remained optimistic about demand bottoming out in the US amid the coronavirus pandemic. US crude stockpiles increased by less than forecast, allaying concerns about a supply glut which had caused US oil prices to crash into negative territory recently.

Meanwhile, crude oil prices received another boost as markets look forward to deeper production curbs by leading oil producers, OPEC and allies. Following raised tensions between Saudi Arabia and Russia over the price war, OPEC+ nations had agreed to curtail crude supply in the wake of the coronavirus pandemic which has dented global oil demand severely.

These production cuts are expected to begin from today and should help balance the supply and demand in global oil markets to some extent. OPEC+ has committed to nearly 10 million bpd supply cuts; however, this still falls short of the 30 million bpd cut in global oil demand estimated for the year on the back of extended lockdown conditions worldwide.

Despite these recent gains, crude oil prices are likely to remain under pressure as long as concerns about the coronavirus pandemic and its economic impact dominate the market sentiment. With the global economy headed towards recession this year, demand for oil is expected to remain weak for a considerable amount of time in the near future.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies

About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
Related Articles
Comments
0 0 vote
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments