Today the oil market finally received some positive news, in the form of an agreement between OPEC member states, Russia, and other interested parties not officially part of the cartel. The group, commonly known as OPEC+, agreed on a 9.7 million barrels cut.
Though normally this would stabilize the market, experts anticipate that the cut is not sufficient. The coronavirus pandemic has caused severe limitations on travel and industrial production, which in turn will lead to a record drop in the demand for oil. Thus, oil prices remain twice lower than they were before the pandemic began, with the Brent crude trading near $31.25, and US oil at $22.05.
Today we expect stock indices to remain lower, as more and more companies will start releasing data on their economic performance since the Covid-19 pandemic began, the results of which are expected to be quite poor.
Economists in the United States are warning that we would see the negative effects of the coronavirus pandemic for quite some time yet. Despite timely action by both the Federal Reserve and the government to unlock stimulus packages, the massive drop in employment and the prolonged lockdown will cause a recession that will last long after the outbreak is over.
Speaking of the coronavirus, the situation still remains serious. Nevertheless, the WHO hopes that Italy has finally seen the peak of the outbreak, as the death toll continues to decline. The United States, Spain, and France remain in trouble, Germany has a substantial number of cases, and the United Kingdom is seeing a rapid growth of new Covid-19 infections.
