The end of ‘Drill, baby drill?’ What analysts are saying about OPEC+ oil output extension

Oil price jumps on OPEC+ extension

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DUBAI: Oil prices jumped more than 2 percent on Friday, hitting their highest in nearly 14 months after OPEC and its allies agreed to extend output cuts. Here, top energy analysts give their reaction to the move.

UBS oil analyst Giovanni Staunovo:
“OPEC+ settled for a cautious approach … opting to increase production by just 150,000 barrels per day (bpd) in April while market participants looked for an increase of 1.5 million bpd.”
SEB chief commodity analyst Bjarne Schieldrop:
“No additional supply from OPEC in April means lower oil inventories not only in April but all through 2021 and into 2022 even if supply is added in May. Price over volume is the name of the game for as long as they can.”
Reuters energy columnist Clyde Russell:
“The problem for the prevailing narrative is that it’s focused on what is happening in the paper crude market, the widely followed and traded Brent and West Texas Intermediate futures. The paper market has a point: Oil demand does look like it will be heading higher, but the problem is a matter of timing. The market is priced for a sharp increase in demand right now, and in the next few months. But the physical crude market is telling another story, with traders there saying there are plenty of cargoes available, especially for delivery to the top-importing region of Asia.”
RBC Capital Markets analyst Helima Croft:
“The prince continues to urge caution in the face of uncertainties about the recovery, insisting that it is better to err on the side of prudence than opt for an ill-timed production increase.”

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