OPEC+ passes first test – but more challenges to come

Summary:

Strong oil rally … The price of Brent rallied 121% from the April 24th low to the June 8th high. The key drivers of that rally include optimism that the demand loss in 2020 will be less than feared and the positive actions and statements from the OPEC+ members. The agreement to extend the period of deepest cuts for an extra month shows a firm commitment by the major producers to maintaining the OPEC+ structure. The loss of Libyan oil, as fighting escalated in the country, also helped support the price rally in May.

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