have been reeling from fears of oversupply after OPEC+ decided to extend output cuts, but gradually increase supply, but UBS is pushing back against oversupply fears and believes now isn't the time to be joining in on downside bets on oil as OPEC+ isn't likely to flood the market and demand is set to rise over the summer months.
Earlier this week, OPEC+ extended its production cuts of 1.66 million barrels per day, or mbpd, which were set to end in 2024, until the end of 2025, and also committed to keep its additional 2.2mbpd voluntary production cuts in place for further three months to September, after which these cuts would be phased out.
But UBS isn't so sure. "We disagree with that point," the bank said, noting that OPEC+ will tailor its production to unveiling demand landscape in the months ahead. On the demand side, UBS painted are less somber picture about demand, estimating demand to see a seasonally pic up over the summer, pushing global oil inventories expected to fall and leading to a rise in prices.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.
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