OPEC is ready to formally seal the output

28 October, 2016

The crude oil gains as the Algerian Energy Minister Noureddine Butarfa hit the market with a statement saying that OPEC has a plan to complete the formal part of the output freeze agreement in the next meeting.  “We are in the process of implementing the Algerian agreement,” said mister N. Butarfa.

He noted that an expert committee consisting of representatives from oil-producing countries will discuss various scenarios of the agreement implementation on the 28th October. Another meeting of the expert committee will be held on the 24-25 November in anticipation of the next OPEC meeting. OPEC agreed in September to reduce oil production to 32,5-33 million barrels per day. In this case, Iran, Libya, and Nigeria will be allowed to produce at the highest levelsof economic disturbances in the country.

OPEC’s pace of production was at a record high level of 33.64 barrels/day. It is expected that the production distribution for each country will be approved by the cartel at the OPEC meeting on 30 November. At the same time, there is an uncertainty over the Russian participation in the agreement. This raises the most concerns, as the Russian oil minister Novak has revealed the country’s stance on the markets rebalance issue.

In addition, Iraq, the member of OPEC, also requested to be released from its obligations of cutting the production, eroding the hopes that OPEC will be able to finalize a freeze deal.

British pound

The British pound posts moderate gains as the UK economy shows resilience in the Brexit turbulence according to the latest data about the third quarter of the GDP. The headline figure rose by 2.3% beating the 2.1% projectionsdespite the gloomy expectations related to the UK vote to leave the EU.

The USD/JPY rose by 0.22% to 104.70 approaching the three-month high, AUD/USD fell by 0.48% with the New Zealand Trade balance falling more into the deficit than expected.

The US Dollar trades slightly lower ahead of the Durable Orders report, to get insight into the consumer expensive expenditures and the GDP. The USDX fell by -0.08% at 98.58.

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