Investing.com – and are registering rises of between 1% and 1.5% this Monday with OPEC+ extending its agreement on crude supply restrictions through 2024 and Saudi Arabia announcing production cuts of 1 million barrels per day (bpd) to a total of 9 million bpd.
In what can be considered the largest output revision in recent years, the cartel now has cuts in place for 3.66 million bpd, equivalent to 3.6% of global demand, including 2 million bpd agreed last year and voluntary cuts of 1.66 million bpd decided in April.
Market reaction was initially very positive but then retreated due to assessments made on the economic context and the demand capacity of major importers.
For Swiss bank UBS, today’s performance of black gold does not change its long-term outlook, seen at $95 by the end of the year.
“Despite the modest market reaction, we take this as a very bullish outcome. The Saudi 1mbpd cut in July can be extended if needed, and the tone at the press conference suggested producer unity. We believe oil demand remains solid, and that the voluntary production cuts should help tighten the market into 2H,” UBS analysts wrote in their Daily Europe note.
The bank maintains oil among its preferred asset classes despite a 9% year-to-date decline in the North Sea contract, and expects “Brent crude at USD 95/bbl by end-2023.”
(Translated from Italian)
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