OPEC+ could be extending current oil output cuts for 1-2 months

Ross J Burland FXStreet

Energy Intelligence reports of a source that has said Opec+ will discuss extending the current 9.7 million bpd cuts for 1-2 months.

"Opec-plus could meet on Jun. 4 to decide on a market management policy that might extend the current production cut pact by up to two months."

Market implications

Inventory levels are on the increase pertaining to a surge in US crude oil imports, particularly from Saudi Arabia. This news was serving to cap the recent rally in prompt prices. "But, it is worth noting the surge in imports is likely a temporary phenomenon as the shipments were sent before OPEC+ came to their historic production cut deal," analysts at TD Securities explained.

With that said, and as demand continues to normalize, we continue to expect crude fundamentals will remain on a tighter path throughout the summer. This will see inventory builds make way for draws, and support our long WTI Dec20-Dec21 spread.

Extensions will only go to serve as further fuell to the bid.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

Week ahead – Central bank and earnings bonanza could roil markets

Fed, ECB and BoJ to sit on the sidelines after September hikes. But RBNZ and BoC poised to lift borrowing costs. Inflation data out of the US, Japan, Australia to also be important. UK budget: no surprises would be good news for the Pound.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.