📝OPEC+ Cuts to Push Supply/Demand Deficit to 2mb/d In 2H: UBS Strategy

Oil is up in Europe morning following the announcement of production cuts from several OPEC+ members totaling just under 1.1mb/d. UBS had previously expected a surplus in the global oil supply/demand balance in 1H before swinging to a 800kb/d deficit in 2H as global demand recovers. The cuts push oil supply/demand into a small deficit in 2Q, growing to a deficit of almost 2mb/d in 2H assuming no reversal by OPEC-k. Not a huge surprise as oil price had drifted below the level at which OPEC+ announced their last cot and that the group had previously indicated the possibility of intervening in markets ahead of the full OPEC+ meeting planned in June. The reduction is positive for integrateds/EllPs across the board, including BP and Repsol in the near-term but I'd note ENI and Gain are among the mom leveraged to positive oil price revisions.

- UBS Strategy