Uncertainty prevails in oil market on upcoming OPEC+ meeting

Posted 06 December, 2018

Uncertainties persist in the oil market ahead of the fateful decision of the OPEC+ members regarding a widely discussed reduction of oil production. The market keeps fluctuating in this context, while prices are highly sensitive to different rumours and speculations. Volatility stays strong in the market on Thursday.

Following the recent fruitless attempts to take roots above $63-handle, Brent prices plunged to some $60.16 today. It seems that prices are likely to keep sliding further below $60 handle.
The rumours that the cartel committee suggested a 1 million bbl reduction as well as agreed on new measures have been rejected, and even before the market has responded to them.

However, the market expectations have been dramatically affected by the statement made by Iran's minister Bijam Zangeneh today. Specifically, he stated that Iran finds the price range at $60-70 acceptable, and thus they are not going to take part in the deal until illegal sanctions are lifted. On the one hand, this position of Tehran failed to surprise the markets much, but risks that it can seed doubts among other exporters and they can refuse from cutting the oil production.

This means that the oil market stays highly uncertain, so there is no chance to predict the further movement of oil quotes this week. Nevertheless, OPEC+ still can disappoint investors, as the market expert believes. 

Previous forecast

07 December, 2018 15:54

← US dollar can get some support from oil

The US dollar is generally uncertain, though the price is fluctuating at the sideline on an upcoming release of the US labour market report. The market expects that the report will dispell recent concerns for the US economy and show the significant strengthening of the employment and salary rates. With this scenario, the greenback will lure demand, though the probable upturn is unlikely to be long-lived. The US dollar can also get some support in its slow upward attempts from the OPEC+ meeting. The markets have fastened their eyes on the OPEC+ talks that are about to finish on Friday.

US dollar can get some support from oil

Next forecast

05 December, 2018 16:58

US dollar faces more and more obstacles on upward path →

Following the upturn, the US dollar has slowed downs somewhat on Wednesday, and now the trend is unclear, though mostly positive one. There is no notable boost, but the markets show some jitters. This situation can be partly connected with the overestimated results of the Washington-Beijing meeting since the initial state of bliss changed into sceptical mood regarding the success of the achieved agreements during the trade negotiations between the countries. The US dollar can see some support from the Beige Book to be released by the US Federal Reserve in the near term unless the authority shares its concerns about possible economic slowdown.

US dollar faces more and more obstacles on upward path
Write a comment
Prove you’re not a bot + 14 = 28