Benchmark crude oil futures rallied last week, with Dated Brent and WTI up around 5% and 3%, respectively. Prices rose mainly as a result of the US-China ceasefire until next March, a decline in US crude oil stocks, a forced reduction of production in Alberta, Canada and, above all, the Opec+ agreement (Opec and its allies) Production by 1.2 million bpd from October from January. The new Opec+ agreement was expected by analysts to limit the market overshoot as non-Opec production is expected to grow 2.4 mbpd next year, while demand is expected to rise only 1.1 mbpd. However, prices continued to be constrained by depressed financial markets and concerns over the success of US-China trade negotiations and doubts about the effectiveness of Opec+’s recent production cutback.
The new Opec+ Output-Cut deal is likely to be an attempt to rebalance the oil market and bring prices below the price, while at the same time trying to keep prices down to the $ 80 level reached in early October. The targeted floor level is estimated by analysts to be around $ 60, but the extent to which this floor price will apply is uncertain and depends on several factors, mainly supply-side ones. Meanwhile, for the first time, the US was a net exporter of crude oil and refined products, exporting a net of 0.21 mbpd in the last week of November.