Brent oil prices stabilised during early Friday trading

Brent oil prices stabilised during early Friday trading after Thursday’s wild oscillations, which ended up with a daily drop of more than 2.6%. Earlier in the week, investors had been anticipating the agreement amongst OPEC+ countries to reduce output in a dynamic that offered support to the price of the barrel. However, yesterday’s announcement of additional voluntary cuts in oil production, in the order of 900,000 barrels per day, was seen by many as insufficient. With economic activity expected to slow down globally over the next few months and demand expected to fall, yesterday’s production cuts disappointed those who anticipated a more decisive stance from the cartel. Against this background, the risk for oil prices is now tilted to the downside, with the $80 support level likely to be challenged.

Ricardo Evangelista – Senior Analyst, ActivTrades