Oil Fundamental Forecast: Bearish
- Crude oil prices[1] clocked in the longest losing streak since 1984+ on fading OPEC oil demand
- Saudi Arabia revived output production cuts as oil paused its descent, but those may be in vain
- Russia doesn’t seem to be for cuts as US keeps pumping oil, perhaps undermining OPEC efforts
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Crude oil prices extended declines from last week as anticipated[3], clocking in a remarkable 12 days of consecutive losses. This was the longest consecutive sessions of losses since at least 1984. The backdrop for weakness in the commodity was as a result of warnings from OPEC that they see demand for their stockpiles easing[4].
As a result, speculation has been renewed that supply cuts from the petroleum-producing cartel could be on the table. Saudi Arabia proposed lowering output in excess of more than one million barrels per day. But cooperation within OPEC nations may not be easily achieved. Even if it is, the impact of production cuts could be limited.
This is because Russia, a key producer of oil, may not be on the same page with OPEC cuts like it was back in 2016. Russia’s President Vladimir Putin briefly met with US President Donald Trump last Sunday in Paris where they talked about oil. During their conversation, Putin said that he would not commit to cutting output.
Instead, he noted that he is happy with current prices
