Oil sits slightly higher on the day but downside pressure remains
It has been a quick reality check for oil prices since the conclusion of meeting between OPEC+ and other international producers, with the 9.7 mil bpd worth of output cuts pretty much scoffed upon by investors at this stage.
Oil declined heavily in overnight trading, falling to a low of $19.95 and is just keeping above the $20 level for the time being. As mentioned before, all that the output cuts deal will do is slow the bleeding but it won't fix the supply glut at hand - far from it in fact.
There is talk about oil importers looking to bolster reserves, but inventories are building further with the issue of storage space shortage not going to disappear any time soon.
For now, oil can take heart in the fact that risk trades have been faring better over the past week or so but if economic worries continue to persist, there is only so much one can be optimistic about oil's prospects down the road.
The recovery in global demand is going to be the key spot to watch but if airlines are still grounded and major economies are still struggling to reopen, oil will continue to stay pressured over the next few months in any case.
The $20 level is the key spot to watch right now, with a firm break below that to see a significant run lower in prices in the coming sessions. Sellers have found it tough to crack the key level so let's see how this holds up now that OPEC meddling is behind us.
