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There are lots of sources for this sentiment out there, this is...

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jdawg

482 Posts.

8

06/04/20

02:03

Post #: 43893742
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Originally posted by jdawg: ↑

Even if we saw a 15m barrels a day cut, it wouldn't be enough to curb the enormous surplus of oil caused by the halving in demand from the global economy (a lot of analysts say demand has dropped 20m+ a day). Yes the oil price would increase, but a lot of people think that big cuts won't do anything more than put a floor under the crazy prices we've recently seen (say, settle at $30 a barrel for the next while). Don't forget that the longer the coronavirus lockdowns last, the higher the risk that the world runs out of capacity to store oil reserves is used - and if that happens, prices could easily drop back to $20 or below.

What we are seeing now is unprecedented, and it's dangerous to assume we will see a sharp rebound in oil as with previous crashes. This could take months. I think oil will become a good buy medium term, but I'm out for now - I think the short term risks are too high.

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There are lots of sources for this sentiment out there, this is an example:

https://www.reuters.com/article/us-global-oil-iea/deep-opec-cuts-wont-be-enough-to-prevent-oil-inventory-build-iea-head-idUSKBN21L222?rpc=401&

OSH Price at posting: $2.73 Sentiment: Hold Disclosure: Not Held
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