Crude prices jumped after Organization of the Petroleum Exporting Countries (OPEC) and its oil producing allies finalize a historic agreement to cut production by 9.7 million barrels per day, which is the single largest output cut in history. Peter McGuire, CEO of XM Australia shared his views and outlook on the same.

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“One word sums up the OPEC meeting and that is underwhelmed. Everyone was expecting that it will have a big reversal. We are up about 3.5-4 percent in Asia trade and now it is up around 1.5 percent so it wasn’t strong at all. I feel that it is underwhelmed,” he said.

Speaking about global demand and supply numbers, he said, “What is going to happen is going to be – yes if the coronavirus is under control within 90 days then it is going to be a slow grind up to the end of 2020 and probably half way through to 2021 as far as production numbers are concerned but if it takes longer than that then it is going to be very tough time for the crude energy markets and it seems to be a very soft energy sector at present. When you start to pull it all apart, it is a fraction sort of deal, it hasn’t got legs and I think it is going to be fairly poor reception to the market.”

In terms of crude oil prices, McGuire said, “Over the next six weeks, I think it is going to be softer from here and it is a troubling time for producers - great for consumers but pretty dire period for producers.”

First Published:Apr 13, 2020 3:38 PM IST