State Street Global Markets: OPEC+ offers little support to oil

State Street Global Markets: OPEC+ offers little support to oil

Equity
Olie Grondstoffen

According to the latest market commentary State Street Global Markets:

OPEC+ offers little support to oil

Ben Jones, multi-asset class strategist at State Street Global Markets:

“In our view the OPEC+ supply cuts will not lift oil prices. The hit to demand far outweighs the supply cuts. This is highlighted by US Gasoline demand this week hitting a new low, and the collapse in air travel around the world.  Less than 100,000 people are now passing through US airports according the TSA. Even when economies begin to open up again we do not expect people to rush to start travelling for ‘unnecessary’ reasons straight away meaning the oil demand hangover will have a long tail.  Crude oil inventories rose by a record figure this week and will continue to build in the coming weeks, and months, despite the efforts of OPEC+.”

Gold shines

Ben Jones, multi-asset class strategist at State Street Global Markets:

“Gold could break through $1800 in the coming weeks.  Real yields around the world are collapsing, futures positioning is not as extended as it has been of late, and ETF demand for the yellow metal is surging.”

Stabilising Measures

Michael Metcalfe, global head of Macro Strategy at State Street Global Markets:

“Financial markets are walking a tight rope across an economic abyss, but the weights of a proactive policy response and a firm focus on the other side, once lockdowns start lifting, are providing balance. Systemic risk and uncertainty remain at unprecedented levels, but investor confidence has stabilised. Importantly this reduces the risk of hysteresis and a much longer and deeper downturn in activity in which the real economy and financial markets are caught in a vicious downward spiral.”