According to analysts from Rabobank, the big question regarding the oil market is whether the Saudis will follow through on this threat to flood markets given their objectives have largely been met already.
“Looking forward we expect the oil market to remain under pressure in most scenarios given the historic demand destruction taking place, however, we also expect supply-side developments will have a meaningful impact on the price formation in the weeks ahead. We see prices following two very different trajectories depending on how the current price war plays out. To that end, we will be closely monitoring Saudi crude oil production and exports as we approach the April deadline for the huge supply increase.”
“Our base case is for the price war to end in the not too distant future given the political pressure that is building on Saudi Arabia and the poor optics of destabilizing markets during a period of global pandemic. If the price war persists though, then the price outlook is far worse and all bets are off as to how low crude oil can go.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.