Gold 1697,565
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EURUSD 1,1957
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DJIA 30859,50
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OIL.WTI 64,565
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DAX 13977,50
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On Thursday and Friday the most important event for the oil market is the OPEC+ meeting. Participants at this event are due to discuss the current oil market and a possible increase in production quotas in April. The cold winter has supported energy prices quite well. Will oil continue to be worth this much longer?
OIL.WTI
OPEC+ is currently facing two problems. The first is a possible increase in production by 500,000 bpd from April. The second problem concerns Saudi Arabia, which is always eager to make its own decisions. This time they are going to unilaterally increase production by 1 mln bpd.
OPEC+ will have to make serious decisions, as high energy prices in the current situation only harm the economy. This has already been stated by some of the biggest consumers – India and China. Russia and the UAE have also reported strong growth in energy demand and are in favour of increased production.
It has also been considered that OPEC+ might refuse to increase production quotas. In this situation, shale oil producers might become more active and could very quickly get their rigs up and running. Also, we should not forget about the oil in storage. Someone might want to cash in on it.
By all accounts OPEC+ was supposed to start ramping up production, but that’s not what happened. According to preliminary reports at Thursday’s meeting it was decided not to increase oil production quotas in April. It was also announced that Saudi Arabia would start cutting production by 1m bpd from April. This was unexpected, and by Thursday evening the price of oil had jumped more than 4.5% and was trading at $64 a barrel.
In summary, we can safely say that the oil price is unlikely to fall much in the next few weeks, given that the weakening dollar is providing quite good support in the current situation.
What’s in store for us today?
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