The test for OPEC at their meeting next week on 5th June is to find the balance between holding onto their market share as the world’s largest oil producing organisation and appeasing its higher cost producing members who are increasingly growing restless from their reluctance to cut back production in order to give oil prices a boost. As oil prices have bounced strongly since the beginning of the year it is unlikely that they will announce a reduction to their daily output target of 30 million barrels a day, a target they have consistently been exceeding even in the face of last year’s crude price crash, proof they are more concerned about market share than market price, in an attempt to keep the US shale threat at bay. If we see no lowering of production oil prices are unlikely to rise much beyond current levels and certainly nowhere near the $100 a barrel OPEC ideally wants to realise, especially at a time when the world’s oil consuming engines of Asia and the US continue to see their economies slowing. As a result, this meeting has the potential to be an own goal for OPEC.
Recommended Content
Editors’ Picks
EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.