OPEC has reached an agreement on whether oil prices can restart the increase? Goldman Sachs and Morgan Stanley not optimistic – Wall Street


After OPEC + reached a cut-off production cut-off agreement, Goldman Sachs and Morgan Stanley issued a warning that there is uncertainty about how to implement the relevant production reduction agreement, which will contain the steady increase in oil prices. Petroleum.

Goldman Sachs analysts Damien Courvalin and Jeffrey Currie have pointed out in their latest research report that the recovery in oil prices (after production cuts have been hit) depends on the real evidence that stockpiles decline and production cuts are underway implemented:

This demand for definitive evidence stems from the alarming surplus of the global oil market and the lack of clear cut production in the second half of 2018.

Morgan Stanley analyst Martijn Rats said that while the agreement reached by OPEC + has greatly reduced the possibility of oversupply, oil prices are unlikely to reach the four-year high set in early October. It is expected that in the second quarter of 2019, Brent crude oil prices will reach $ 67.50 per barrel, which is $ 10 lower than the bank's previous estimate.

Last Friday, after a long multiparty game, OPEC (OPEC), a Russia-led non-OPEC producer, reached an agreement in Vienna to reduce production by 1.2 million barrels a day from of January next year, reducing production by 800 thousand barrels per day. Day. OPEC will evaluate production cuts in April next year. Iran claims to be exempt from production cuts.

The total reduction in production of this OPEC + program is greater than the planned level of trading released by the OPEC representative: 1 million barrels per day. International oil prices rose steadily, up 5% on the day. The media said that after Russia proposed a 2% reduction in Russia's output, Brent crude futures rose about 6% in intraday trading, which is expected to hit the biggest gain in a day since December 2016.

The Wall Street Journal commented that the agreement demonstrates Russia's new influence as an oil-producing country and the importance of Russia's alliance with Saudi Arabia. The agreement also shows that Saudi Arabia has transferred some of the market power to Russia.

The production cuts are facing tremendous pressure from Trump.

The Wall Street remarks mentioned earlier that the day before the OPEC meeting, Trump's national day of celebration on Wednesday, did not forget to send a call to the tweet: I hope OPEC will keep the current flow of oil and not the limit. The world does not want to see, nor does it need higher oil prices! Although the Saudi Crown Prince was questioned about the murder of a Saudi journalist, Trump still expressed his support for the Saudi government last month. His recent call for oil prices once made the prospect of a decision to cut output confused.

* This article is from Wall Street (WeChat ID: wallstreetcn). He opened Wall Street to see VIP members and immediately access the systematized services of the financial market.*


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