Output cut is insufficient for price rise: Goldman Sachs

According to the analysts of Goldman Sachs, the decision of the OPEC and non-OPEC countries to reduce oil production by 10 million barrels per day will be insufficient for price rise, Report informs.

Reuters says that the deal to cut the output by 10 million barrels per day is a historical, but insufficient to eliminate the problem.

Experts say that no deal will be sufficient to compensate for the sharp decline in demand.

The analysts of the bank still hope that the prices of crude oil will continue to fall in coming weeks because the oil storehouses are filled early due to declining in demand over coronavirus outbreak and related restrictions.

Yesterday, OPEC and non-OPEC countries confirmed the ‘Declaration of Cooperation’ on output cut at the 10th meeting held through video conferencing.

According to the amendments in the ‘Declaration of Cooperation,’ the production quota of Mexico was set at 100,000 barrels instead of 400,000 barrels for May-June. In order to compensate for the other part of Mexico’s commitment, the U.S. agreed to cut its production by 300,000 barrels more.

Thus, OPEC+ reached a deal to cut the output by 9.7 million barrels from May 1.