Brent may stay range-bound in Q1; risks loom in 2020

Last week’s OPEC+ decision to cut output by a further 500,000 barrels a day during the first quarter of 2020 – in addition to the existing cut of 1.2 million barrels a day – has not had the big bang impact on the crude oil prices that one would normally associate with an announcement of this type. On Friday, Brent jumped close to $ 65 a barrel but later corrected to $64.

The decision to take the aggregate production cut to 1.7 million barrel a day for the next three months means that the demand supply fundamentals would obviously tighten slightly, but not tight enough to boost prices dramatically.