Brent Crude Oil to test the $46 level – OCBC

OPEC+ extends current production cuts by one month, Howie Lee, an economist at OCBC Bank, informs. He forecasts that Brent Crude Oil can reach the $46 level this week. 

Key quotes

“OPEC+ will maintain its current production cuts of 9.7mbpd by one more month to July (9.6mbpd to be exact, given Mexico ends its supply constraints).” 

“Brent for July delivery closed on Friday at $42.30/bbl – we think it may test $46/bbl this week, potentially knocking on the doors of price levels not seen since the oil price crash in March.” 

“Russia and Saudi Arabia are expected to keep a closer eye on output errant members, particularly Iraq – the latter is expected to make good its overproduction over the next three months in Q3.”

“The exceptional US jobs data on Friday should add a broad risk-on momentum to asset classes worldwide, which crude oil should benefit from.”