Oil prices have fallen significantly over the last two months. WTI saw a high price of $87 in early April – to $73 today.

This is partly down to OPEC+ agreeing a recent output increase.

OPEC+ has coordinated to maintain strong prices over recent years, but this has come at the cost of losing market share to non-member states.

This increased supply to protect market share, suggests a new equilibrium with lower oil prices for the near to medium future.

Sustained low oil prices could help reduce inflation – allowing the Fed to cut rates earlier than the market expects.

The market view is for the Fed to take a very slow approach – with the first cut this year. Low oil prices may allow cuts to happen faster than expected.