Ruchi AgrawalMoneycontrol Research
- Strong expectations of a supply cut but scepticism over the final deal
- Estimation of a 1-1.4 million barrels per day production cut
- Uncertainty on whether Russia would be willing to forego barrels - Qatar announced plans to exit OPEC, citing limited benefits from the cartel
Crude oil prices have seen a sharp plunge in the last two months, which impacted fortunes of oil exporting countries. The softness was due to: 1) Expectations of a slowdown in demand growth; 2) Softness in implementation of Iranian sanction, with US granting waivers to eight countries; 3) Rapidly rising supply; 4) An uptick in the US reported inventories; and 5) Covering of hedged exposure by banks.