Oil Prices Bounced Back After Markets Overreacted to the OPEC Announcement

Two weeks ago, oil markets reacted negatively to OPEC+'s decision to unwind 2.2M bbl/day in voluntary production cuts later this year, with oil prices tumbling to multi-month lows. Standard Chartered pointed out that the selloff was an overreaction triggered by a combination of several factors including extreme macroeconomic pessimism, speculative shorts, and over-enthusiastic algorithmic trading that crowded out more fundamentally-based traders. Thankfully, oil prices have largely corrected to their previous levels before the OPEC+ announcement,…