ONLINE FOREX BROKER
2019-11-11 • Updated
Oil prices regained their footing on Monday following substantial losses they experienced last week as an OPEC-led committee pledged to back extension of the supply cut deal and as investors favored riskier assets after the first round of the election. Emmanuel Macron securing a spot in the second round avoided the horrific scenario of a contest between anti-EU Le Pen and the far-left Melenchon. The threats for the Euro area had been eliminated, and investors embraced more risk. A collective sense of relief that the Eurozone is over another hurdle resulted in a short-term risk-on rally.
U.S. West Texas Intermediate (WTI) crude oil futures jumped above $50 from $49.18 seen last Friday.
Brent oil futures peaked to $52.95 after following $51.55 last week.
To the present day, OPEC and non-OPEC members struck a tentative agreement to sideline their production beyond June, but there is still no consensus on the timing of the agreement and countries’ individual commitments. The next meeting of the OPEC members will be held in Vienna on May 25.
Just a small reminder, OPEC countries and other major oil producers are committed to reducing oil stockpiles and all signatory parties participating in the output cut deal are committed to restoring the market’s stability in November, 2016. Up to date, compliance with the cuts has improved in March compared to the previous month (compliance to supply curbs was more robust in March (98%) compared to February’s 90% estimate).
As energy ministers of the output deal cut signatories remind the markets about their intentions to curb oil supply, the oil prices will be heading upwards. Refusals to adhere to the cuts would become their headwinds.
The current oil rally will likely be faltered once again as we see more signs of the US crude oil production revival.
Last week, U.S. drillers added 5 rigs to oil fields, bringing them up to the count of 688, according to data from Baker Hughes Inc.
US crude stockpiles fell last week said Energy Information Administration last Wednesday. But it happened mainly because US refineries increased their output (the gasoline stocks have increased).
Another headwind for oil futures might be the issuance of the Trumps executive orders on energy and the environment later this week. The orders will make it easier for the US develop energy industry offshore, and will lead to increased production of US crude oil.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
China's economy is rocketing. On the other hand OPEC+ countries take the decision to cut the production. What will be the impact on the oil price?
US oil exports reached a record last week at five million barrels a day, according to Energy Information Administration data…
Let's dive into the latest developments shaping the global economic landscape. Good news first: the threat of an unprecedented US debt crisis has receded, as US lawmakers passed a bill to raise the debt ceiling and avoid a catastrophic default. Phew! But don't pop the champagne just yet, because storm clouds are still looming. High inflation, rising interest rates, and sluggish growth are challenges that have yet to disappear.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Let's dive into the world of gold. Currently, the price of gold, represented by XAUUSD, is stuck in indecision, hovering around the $1,975 mark. The market is anxiously awaiting two important factors: the release of the Federal Reserve's meeting minutes and the extension of the US debt ceiling.
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