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Jefferies says the OPEC+ meetings on March 5 and 6 are now critical, and that cuts of at least 1 million barrels per day for the second quarter are needed rather than the 600,000 bpd recommended by the technical committee. Brent's two-week backwardation collapsed into contango as flat prices fell sharply.
Rystad and the EIA have also cut their 2020 Brent forecasts.
Expectations of deeper OPEC+ cuts support crude prices, but weakening demand from coronavirus and a shift to contango signal a bearish near-term balance. Lower crude weakens the energy-linked cost of biofuel feedstocks and can pressure vegetable oil prices.
rigzone.comAndreas ExarheasFeb 28, 2020After 250 past bearish geopolitics events, Crude Oil (Brent) moved a median -3.1% over 5 sessions (36% higher; middle half -7.9% to +1.6%), and -5.5% over 20.
After 255 past bearish geopolitics events, Crude Oil (WTI) moved a median -2.4% over 5 sessions (31% higher; middle half -7.0% to +1.7%), and -5.0% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Brent's curve collapsed into contango and forecasts were cut, while OPEC+ cuts were seen as needed, showing weak physical and demand outlook.
