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WTI Crude Oil Jumps on OPEC Production Curb

OPC agrees to cut crude oil production by 2 million barrels daily, sending the price of crude oil higher on more limited supply, increasing inflationary pressures, and angering the Biden administration.

   

  1. WTI Crude Oil has continued to rise to over $88 per barrel as OPEC announced a production cut of 2 million barrels per day, double the rumoured 1 million barrels per day cut. However, there are signs that the price has topped out and it seems to be beginning a bearish retracement now.
  2. After seeing risk-off sentiment make a recovery earlier this week, markets are again entertaining the idea of an earlier dovish pivot from the Fed, pricing in at least a 0.25% rate cut in 2023 and more cuts in 2024. This has helped global stock markets to rally over the past day.
  3. In the Forex market, the US Dollar has begun to weaken again, with the British Pound and the Euro looking strong. The EUR/USD currency pair almost reached the parity level yesterday before falling again. The Japanese Yen is also weak but is intermittently boosted by supportive intervention from the Bank of Japan, the threat of which seems to be keeping the price of the USD/JPY currency pair below ¥145.
  4. The ADP Non-Farm Employment Change forecast is predicting the US economy added 208k net new jobs last month, in line with the expected forecast level of 200k.
  5. The Reserve Bank of New Zealand maintained its interest rate at 3.50% as had been widely expected.
  6. US ISM Services data came in slightly higher than had been expected, suggesting there is still healthy demand for services in the US economy despite the technical recession.
  7. It is a public holiday today in China.
  8. Daily new coronavirus cases globally dropped last week for the eleventh consecutive week, giving rise to the hope that the pandemic is finally over in any meaningful sense.
  9. It is estimated that 68% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 7.9% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.  
  10. Total confirmed new coronavirus cases worldwide stand at over 624.9 million with an average case fatality rate of 1.05%.  
  11. The rate of new coronavirus infections appears to now be significantly increasing only in Austria, Germany, Singapore, and Taiwan.  

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