- Oil prices are expected to remain in the upside trajectory amid soaring supply worries.
- Biden’s administration may use oil from SPR to offset the impact of OPEC’s production cuts.
- The continuation of the current pace of hiking rates by the Fed will drop the oil demand projections.
West Texas Intermediate (WTI), futures on NYMEX, have surrendered the immediate hurdle of $88.00 and are oscillating lower after four consecutive bullish trading sessions. After a juggernaut rally, a minor correction seems to be a sign of long liquidation and the continuation of the upside is highly biased for now.
Accelerating supply worries after OPEC+ announced the biggest production cut since the Covid-19 pandemic has infused adrenaline rush into the oil bulls. The oil cartel will cut its entire production by two million barrels per day (bpd) from November. It is worth noting that many OPEC players have failed in meeting their sanctioned quotas due to limited production capacity, therefore, the impact could dwindle.
US President Joe Biden has been criticizing the additional production cuts by OPEC and its allies as he believes that global economic fundamentals are unable to support the production cut for now. News wires from the White House narrate that Biden’s administration would use oil from Strategic Petroleum Reserves (SPR). This might offset the impact of OPEC’s production cut to some extent.
Going forward, the minutes of the US Nonfarm Payrolls (NFP) will be keenly watched. The extent of decline or additions will indicate the mood of the Federal Reserve (Fed) towards the rate hike. Upbeat payroll numbers will support the Fed to continue the pace of hiking interest rates and will decline the demand for oil due to diminishing economic activities.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD stands firm above 0.6500 with markets bracing for Aussie PPI, US inflation
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up. The pair traded at 0.6518.
EUR/USD mired near 1.0730 after choppy Thursday market session
EUR/USD whipsawed somewhat on Thursday, and the pair is heading into Friday's early session near 1.0730 after a back-and-forth session and complicated US data that vexed rate cut hopes.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
Bank of Japan expected to keep interest rates on hold after landmark hike
The Bank of Japan is set to leave its short-term rate target unchanged in the range between 0% and 0.1% on Friday, following the conclusion of its two-day monetary policy review meeting for April. The BoJ will announce its decision on Friday at around 3:00 GMT.