OPEC+ Bullish on Demand Prospects
Oil prices are coming off a little as sentiment takes a dip, the Fed highlights outlook risks and the dollar bounces back.
Crude prices still remain around the upper end of their ranges though as OPEC+ met on Wednesday to review compliance with the previously agreed levels. The group opted not to raise output further, after reducing cuts by two million barrels per day from August to 7.7 million.
The only difference is a slight deepening of the cuts in the coming months to compensate for Iraq, Nigeria, Angola and Kazakhstan missing their targets. The move was in line with expectations, although one positive was the view that demand will hit 97% of pre-pandemic levels by the end of the year. A staggering bounceback under the circumstances.
WTI is trading around $42 and has been in a holding pattern for a number of weeks as traders navigate an uncertain global economic environment and weigh up the prospect of oil rigs coming back online. The rally is low on momentum now though which could invite a small correction.