Brent oil price slides on demand concerns despite OPEC+ extending cuts
Despite the Organisation of the Petroleum Exporting countries and its allies agreeing to extend supply cuts on Tuesday it was unable to offset investors’ concerns about global demand for crude.
Oil prices fell on Tuesday as investors concerns over global demand for the commodity outweighed OPEC+ decision to extend supply cuts until March 2020.
Brent crude futures slid 42 cents to $64.64 a barrel, while US crude futures for August tumbled 38 cents to $58.71 a barrel.
OPEC+ continue to support oil prices with supply cut extension
To offset investors’ fears over weakening global demand for oil because of a myriad of macroeconomic headwinds, OPEC+ members agreed to extend supply cuts until March 2020.
However, despite OPEC+ members setting aside their differences to support oil prices, their efforts were not enough to offset investors’ fears of a global economic slowdown, driven by the US-China trade war and rising tensions in the Middle East.
‘It was the bare minimum OPEC could agree on in order to prevent a major meltdown in prices,’ PVM analyst Tamas Varga said in a note to investors.
‘Member countries noted that global oil demand growth for this year has fallen to 1.14 [million barrels per day] whilst non-OPEC supply is expected to grow by 2.14 mbpd.’
‘It appears that the supply side of the oil equation is supportive for oil prices, but demand concerns are forcing oil bulls to keep at least part of their gunpowder dry,’ he added.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
European Central Bank meeting
Learn about how the ECB meeting affects interest rates and price stability ahead of the next announcement.
- How might the next meeting affect the markets?
- What are the key rate decisions to watch?
- Why is the Governing Council announcement important for traders?
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
