In oil market sunk by coronavirus, giant output cuts make ripple, not big waves - Reuters:
Minimal oil price gains on Monday show record output cuts by giant producers will still leave them with a mountain to climb to restore market balance, industry watchers said, with the coronavirus pandemic decimating demand just as stocks swell.
The day after the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia agreed to reduce output by 9.7 million barrels per day (bpd) in May and June - equal to nearly 10% of global supply - prices inched up 1% on average, remaining 50-60% down for the year so far.
That headline cut by the grouping known as OPEC+ may be more than four times deeper than the previous record set in 2008, and may provide a floor for prices according to some analysts, but the reduction still dwarfed by the near 30 million bpd drop in demand in April already anticipated by forecasters like Goldman Sachs.
What’s more, governments in countries around the globe are considering extending travel and social lockdown measures that have sapped fuel use in order to prevent the coronavirus from spreading.
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