29 May, 2017
On Thursday, OPEC announced that the existing output cut agreement will be extended for an additional 9 months, which was in line with market expectations.
However, the scale of output cut remains the same at 1.8 million barrels a day. Besides, no new OPEC member states will join the agreement extension. In addition, the market witnessed some profit-taking pressure which weighed on oil prices resulting in a drop of 5%.
On early Friday morning, WTI spot and Brent crude spot hit a 2-week low of 48.31 and 51.17 respectively. The drop was followed by a rebound this morning.
The next meeting of OPEC and non-OPEC oil producers is schedule 30 November.
OPEC member states, Iran, Libya, and Nigeria are still exempted from the output cut agreement and have been increasing their production. Some non-OPEC oil producers, such as Russia and Kazakhstan have also attempted to boost their production.
The US shale oil industry has seen a marked recovery since February last year due to the rebound in oil prices. The US Baker Hughes data (that records the number of new Oil Rigs) is showing additional Rigs added every week.
In general, the oil supply remains high which has, and will, offset OPEC’s output cut effort to an extent. In the long term, oil prices are still under pressure.
On early Friday morning, we have seen USD weakening with the dollar index currently testing the support line at 97.00. USD/JPY retreated, currently testing the support line at 111.00.
US durable goods, core durable goods (Apr) and Q1 GDP second reading will be released at 13:30 BST this afternoon. The first Q1 GDP reading indicated a mere 0.7% growth, which was the slowest growth in three years. If we see a higher second reading, it will likely provide USD support.
The dollar remained under pressure after the Trump's criticism about the strengthening of the national currency. Despite doubts that the influence of the president...
On Monday, the dynamics of oil was in the spotlight on a combination of negative factors by both the potential demand and the supply part. Asian markets...
This report is release twice a year and provides an insight into the conduct of monetary policy and economic developments and prospects for the future for the...
Cable (GBPUSD) took a hit yesterday as Boris Johnson resigned from the Cabinet following the earlier decision by David Davis to part ways...
The UK's Brexit Secretary David Davis has resigned along with two junior ministers, Steve Baker and Suella Braverman, over PM May's latest softer Brexit proposals...
The markets remain subdued after yesterday's 4th of July celebrations in the US. Despite this Oil headlines are dominating the markets once again. US President Trump...
The gold chart has played out as a double top with a break under 1300.00 signalling a move down to 1240.00 from its highs at 1365.00. We have now hit the 1240.00...
The gold chart has played out as a double top with a break under 1300.00 signalling a move down to 1240.00 from its highs at 1365.00. We have now reached...
Risk on sentiment returned briefly yesterday as markets retraced some of Mondayâ€™s selloff but sentiment in Asia has declined overnight. The PBOC cut...