Just In: The Saudi energy minister said Sunday that effective Crude Oil supply cuts by OPEC and its allies, a group known as OPEC+, will amount to 12.5-M BPD because of higher output in April from Saudi Arabia, the United Arab Emirates and Kuwait.
Sunday, an agreement by Crude Oil producing nations to cut output by a record amount may sustain last weeks bounce in stocks, though stay-at-home restrictions and closures tied to the coronavirus pandemic continue to weigh on global demand.
OPEC+ agreed Sunday to cut output by a record 9.7- BPD for May-June, representing around 10% of global supply, to support prices due to the coronavirus pandemic.
The agreement, could put a floor on Crude oil prices and provide a psychological boost for stock investors.
The S&P 500 rose 12% last week, marking its best weekly gainer since Y 1974.
Some analysts believe the scope of any Crude Oil-related rally will be limited by the coronavirus-related shutdowns that have slowed economic activity around the world.
If the global economy stays closed for another few months this 9.7-M production reduction will be meaningless because people are not driving.
The deal commanded by President Trump was not unexpected, but because it happened it should provide some investor reassurance.
The broader market will see this as another point of stabilization as the economy, primed by favorable fiscal and monetary policies, seems to be avoiding the worst case market scenarios.
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