Gold 1876,035
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EURUSD 1,1876
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DJIA 29313,50
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OIL.WTI 42,67
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DAX 13129,74
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The oil market has been in an unusually narrow range for six months now. Meanwhile, an event is approaching which could dramatically alter the balance of supply and demand, and therefore the value of black gold. We are talking about the upcoming meeting of OPEC+ member countries. It is scheduled to take place from 30 November to 1 December.
OIL.WTI
Participants in the transaction will discuss the level of production reduction after December 2020. To date, the cartel and its accession countries have reduced production by 7.7 million barrels per day. However, the current agreement will reduce this to 5.7 million barrels per day from January 2021. This is already included in the first quarter 2021 futures price.
However, preliminary negotiations by the Technical Committee, which met on Monday, led to a recommendation to postpone production growth by 1-2 quarters. The reason is a second wave of coronavirus infection and a sharp increase in Libyan oil production. Of course, this could support black gold quotations in the short term. But there are no official statements yet, and everything is circulating amidst rumours.
What’s more! There are also much more serious rumours. The UAE is considering exiting the OPEC+ deal. The reason for this is disagreement with Saudi Arabia and Russia (the countries that have reduced oil production to the maximum) on quota distribution. According to sources, the UAE Energy Minister expressed the following opinion in a closed session of OPEC+ on Tuesday. It is required that all parties to the transaction fulfil their previous commitments to completely reduce oil production. Only then should the current agreement be amended or extended. It is no secret that at least half of the OPEC+ countries are guilty of overproducing oil in excess of the agreed volumes.
All this is superimposed on fresh data from Cushing, where oil storage facilities are already 83% full, which is only 3 million barrels below spring peaks.
All of this shows that the volatility, which has decreased significantly in recent months, could explode at any time, showing the huge price swings we saw this spring.
What awaits us today?
09.30 Business activity index for the German manufacturing sector for November
10.00 EU Productive Sector Business Index for November
10.30 UK Service Business Activity Index for November
15.45 US Manufacturing PMI for November
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