Oil: Rebound not to last long – ANZ

The crude oil price rebounded, recouping some of the losses of Monday, following the breakdown of the OPEC+ alliance. The rebound is not expected to last long, with Saudi Arabia and Russia boasting about how much they can boost output by as the battle for market share begins, strategists at ANZ Research apprise.

Key quotes

“Investors were somewhat buoyed by the news that US tax cuts may shield the commodity markets from loss of demand.”

“The rally remains on shaky ground, Saudi Arabia and Russia setting the scene for a lengthy battle for market share in the oil market.”

“Saudi Arabia warned that it would boost output by 25%. The OPEC producer said it can reach 12.3mb/d next month. This was quickly followed by Russia, who said it can increase production by 500kb/d to a record 11.8mb/d.” 

“The US shale industry warned it might see output cuts as a result of the lower prices.”