Oil Surges After OPEC+'s Unexpected Crude Production Cut
Crude is currently trading at US$80.06 per barrel, up eight per cent, since Sunday’s announcement from OPEC+. The committee stated the cut is a “precautionary measure aimed at supporting the stability of the oil market."
“The importance of yesterday's OPEC cut cannot be overstated,” Nuttall, partner and senior portfolio manager at Ninepoint Partners, said in an email to BNN Bloomberg on Monday.
He explained that global inventories were already set to end this year at an eight-year low and now additional production cuts could more than double the pace of oil draws — pushing the price of the commodity higher than market participants had anticipated.
“We think oil will trade to over US$100 (per barrel) by the end of the year,” Nuttall said.
The market was caught off guard by OPEC+ decision to cut, but Nuttall added that this bold move should be enough for the market to now shift its focus to the task of enormous stock draws and oil supply challenges.
“We remain bullish,” Nuttall said.