Crude oil tanks
|Oil prices are back below their level at the OPEC + meeting. Brent Crude and WTI are currently trading at 58.66 and 49.09 respectively, approaching 58.10 and 48.50 short-term. Dropping by more than 30% since their early October 2018 high, they are still headed down, despite the effort from OPEC + to reduce supply by 1.2 million barrels per day. Worries of a deceleration in global economic growth should weigh on the demand, as the US, recently named the largest oil producer worldwide, is ramping up its production by 8 million bpd by year-end. This means OPEC + production will have to be reduced further to convince investors of a supply shortage. However, recovery potential is not to be neglected. US-China resolution of trade policies is advancing. Crude prices are expected to drop further short-term, as a recent speech from China’s President Xi Jinping made no specific mention of reforms. This week’s Central Economic Work Conference in China should provide more details, which should comfort investors that Chinese authorities are willing to implement tax reforms.
Stay on top of the markets with Swissquote’s News & Analysis
Macro outlook worries markets
Investors are pricing in coming economic events. The Japanese yen is gaining ground against major currency pairs while the recent Xi Jinping speech on the occasion of China’s 40th anniversary of Reform and Opening did not reassure investors that further reforms would be implemented. US futures are stabilizing after a sharp drop Monday, while Asian and European shares remain red across the board. Japanese Topix and Nikkei 225 indices are trading at May 2017 and March 2018 lows, closing today’s session at -1.99% and -1.82%, while Euro Stoxx 50 is down 0.50% at opening. As the US Federal Reserve meeting approaches, followed by the Bank of England, the Bank of Japan and others (6 central bank rate decisions in total), equities will be volatile this week. EUR/USD is currently trading at 1.1375, approaching 1.1390 short-term amid expectations of a more dovish Fed following Wednesday’s FOMC meeting.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.