Oil prices in free fall…..
Two highly bearish events have hit the oil market and oil prices are dropping heavily to currently 4 year-low.
OPEC and non-OPEC oil producers failed to agree on an extension as well as further oil production cuts on Friday. This means that when the current OPEC+ deal to cut expires this month, there are no restrictions on production on any oil producer and uncertainty is therefore extremely high as regards production levels from April. Hopes ahead of Friday’s meeting were that the OPEC+ group of oil producers would agree on a 1.5 mio. barrels per day oil production cut – so a no-deal is therefore highly bearish for oil prices.
Combined with continued escalation in coronavirus outbreaks and preventive measures by governments and companies around the world, the scene is set for further uncertainty in both the oil market and financial markets.
Over the weekend, Chinese trade activity data was released, showing drops in both imports and exports – this morning, Japan’s GDP came out lower than expected. ECB monetary statement is released on Thursday.
(Source: Global Risk Management)