The OPEC+ group's decision to defer their planned increases in supply has not been sufficient to halt the bleed in supply risk premia, TDS Senior Commodity Strategist Daniel Ghali notes.

The pressure remains on crude oil prices

“Our return decomposition framework continues to point to the erosion of supply risks from energy market pricing. Combined with a continued deterioration in demand sentiment embedded within prices, the pressure remains on crude oil prices.”

“Historically, implications of OPEC+ decisions have taken a few days to filter through to market pricing, suggesting that these trends could reverse course. Still, while we expect modest-scale buying activity from CTA trend followers in WTI crude, we do not see any signs that OPEC's decision has halted the bleed in supply risk premia for the time being.”