{"id":171553,"date":"2020-06-03T07:30:42","date_gmt":"2020-06-03T11:30:42","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=171553"},"modified":"2020-06-03T07:30:42","modified_gmt":"2020-06-03T11:30:42","slug":"brent-parties-at-40","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/06\/brent-parties-at-40\/","title":{"rendered":"Brent parties at $40"},"content":{"rendered":"<div id=\"inves-3651838315\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">June 3, 2020<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p><strong>By Han Tan, Market Analyst, <a href=\"http:\/\/countingpips.com\/contributors\/contributor-profile-forextime\/\">ForexTime<\/a><\/strong><\/p>\n<div class=\"article-body\">\n<div class=\"field-body\">\n<div class=\"field-items\">\n<div class=\"field-item even\">\n<p>Brent Oil has breached the psychologically important $40\/bbl mark, and is trading at its highest levels in nearly three months. Brent\u2019s current prices are another clear risk-on signal to the markets, with Asian equities climbing while regional currencies are advancing against the US Dollar today. US and European stock futures are also gaining at the time of writing.<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.forextime.com\/images\/maa\/brenth1_12.png\" alt=\"\" \/><\/p>\n<p>OPEC+ is reportedly close to extending its current supply cuts programme by one month. Under the existing deal, which was sealed on April 12, the alliance of major Oil producers agreed to lower output according to the following schedule:<\/p>\n<ul>\n<li>9.7 million barrels per day: May and June<\/li>\n<li>7.6 million barrels per day: July through end-2020<\/li>\n<li>5.6 million barrels per day: 2021 until April 2022<\/li>\n<\/ul>\n<p>According to latest media reports, OPEC+ is now preparing to keep its output cuts of 9.7 million barrels until the end of July, before easing up.<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.forextime.com\/images\/maa\/brentdaily_9.png\" alt=\"\" \/><\/p>\n<p>Recall that even after the historic deal was announced over the Easter weekend, Brent continued to drop by over 30 percent through late April. This was because, despite the planned OPEC+ output cuts, global demand was seen flailing in the wake of the coronavirus crisis.<\/p>\n<p>Since April 27, as more major economies have reopened,\u00a0Brent has embarked on a stunning rally of about 76 percent. The proposed output cut extension is appearing to have the desired effect on Oil prices this time around because it comes at a time when worldwide demand for Oil appears to be recovering. US crude stockpiles are set to register four consecutive weeks of declines, pending confirmation later today by official US government data.<\/p>\n<p>Even though $40\/bbl Brent is a notable milestone amid the current market environment, it needs to climb another 50 percent before it can return to the $60 handle that we saw at the onset of 2020. Oil\u2019s path for a sustained recovery may be threatened by a second wave of lockdowns or a return of US shale. The longer term outlook could remain dampened if international travel is disrupted for many years to come, as the world adjusts to the \u201cnew normal\u201d. Even as Oil bulls enjoy their fortunes since end-April and risk appetite gathers momentum, the downside risks could yet pull the plug on\u00a0the party.<\/p>\n<p>With the expected OPEC+ output cut extension already mostly priced in, efforts to rebalance global Oil markets must endure and the global economy must show further signs of normalising before Oil prices can claim significantly more gains past $40.<\/p>\n<p>&nbsp;<\/p>\n<\/div>\n<\/div>\n<\/div>\n<p><em><strong>Disclaimer: <\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n<\/div>\n<hr \/>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-54242 alignleft\" src=\"https:\/\/www.countingpips.com\/articles-analysis\/wp-content\/uploads\/2014\/07\/Forex-Time-Logo.png\" alt=\"Forex-Time-Logo\" width=\"262\" height=\"90\" \/><strong>Article by <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.countingpips.com\/contributors\/contributor-profile-forextime\/\">ForexTime<\/a><\/span><\/strong><\/p>\n<p><strong>ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 <a href=\"http:\/\/www.forextime.com\" target=\"_blank\" rel=\"noopener noreferrer\">www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Han Tan, Market Analyst, ForexTime Brent Oil has breached the psychologically important $40\/bbl mark, and is trading at its highest levels in nearly three months. Brent\u2019s current prices are another clear risk-on signal to the markets, with Asian equities climbing while regional currencies are advancing against the US Dollar today. US and European stock [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-171553","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/171553","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=171553"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/171553\/revisions"}],"predecessor-version":[{"id":171563,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/171553\/revisions\/171563"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=171553"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=171553"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=171553"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}