Has OPEC thrown oil another lifeline?

25 July, 2017

Has OPEC thrown oil another lifeline?

The Oil markets are attempting to extend their gains during early trading on Tuesday after OPEC and Non-OPEC members displayed optimism over the current production cut deal and seemed confident that the path they were treading would eventually rebalance the markets. Gains were also supported by Saudi Arabia pledging to make deeper cuts to its crude exports in August, and Nigeria agreeing to cap production output at 1.8 million barrels a day.

While OPEC’s optimism and public pledge of commitment towards tackling the ongoing oversupply of Oil in the market may continue to support its valuation in the short term, investors should keep in mind that no deeper cuts were made at this point in time. While this was not expected to be the outcome to the meeting in Saint Petersburg, the unexpected outcome would have likely encouraged the material bounce higher in price that Oil producers are looking to eventually achieve.  

The OPEC meeting in St. Petersburg was simply a renewal of commitment by OPEC and non-OPEC members to respect their current production cut deal.

All in all, oversupply will continue to dominate price action in the Oil markets for the foreseeable future and the markets will likely remain anxious over higher production volumes from other producers. The recent threat that an OPEC member such as Ecuador could have been considering leaving the production cut deal does also indicate the element of stress that the production cut agreement is putting on those taking part. 


Source link  
Sterling lower ahead of UK jobs data

Investors who were itching for another opportunity to offload Sterling were given a thumbs up on Tuesday, after BoE officials sounded more...

NZ inflation beats expectations

It's been a strong showing for CPI data released moments ago for the New Zealand economy. The lift to 0.5% q/q (exp 0.4%) is a strong jump...

FTSE nears key levels

It was a day of highs and lows for the UK economy as the political speech from the prime minister did little to quell rumours she may not survive the election, and there could potentially be talk...


What to expect from the BoE?

Today’s Bank of England Monetary Policy Committee (MPC) announcement is the main event of the week. While it is highly unlikely...

A reversal or a dead cat bounce?

The greenback weakness has been the primary focus in FX trading this year. On Tuesday, the dollar index fell to a 2.5-year low of 91.62, with losses exceeding 10%...

Draghi turn to drag the Euro?

Last week the greenback was the biggest loser among all major currencies. The dollar index slipped to a 10-month low, while the Euro, the Pound...


Dollar bulls return on confident Fed

The U.S. dollar and Treasury yields across the curve bounced higher after the Fed...

FX Market weekly outlook

The Euro ended last week in the positive territory after we saw strong support around the 1.0850 area. Looking at the technical picture for this pair, we can see that the daily trend remains below 1.1280 peak, therefore the current recovery is likely to be short-lived...

Daily Technical Outlook for October 27, 2016

The Euro bounced during yesterday after reaching a major support located at 1.0850 in the weekly chart. However, the current recovery can be short-lived as long as prices continue to trade below 1.1040peak, which represents the post-ECB high...

  


Share: