Crude Oil Price Jumps on Optimism Ahead of OPEC+ Meeting. Where to for WTI?

Yesterday, the price of crude oil experienced a decline for three weeks before rebounding strongly due to favorable economic news and challenges faced by the US Dollar. The OPEC+ meeting that begins this weekend is now the primary concern for the market.

China’s Caixin PMI exceeded expectations and offset the weak official PMI reading from Wednesday. Japan’s private capital expenditure and the US ADP jobs data also exceeded forecasts. The Eurozone CPI decreased, contributing to a positive market sentiment.

Although not all data presented positive results, the complete set of statistics can be accessed through the economic calendar provided. Additionally, market sentiment seems to indicate confidence in the potential passage of the US debt ceiling agreement by the Senate on Friday.

The possibility of a resolution has caused a decline in Treasury yields, which may persist if the vote is successful without any issues. The benchmark 2-year note has lowered by approximately 30 basis points from its peak of 4.64% observed last week at this time.

The depreciation of the US Dollar exhibited a wide-ranging impact, particularly on the Australian Dollar which is associated with global economic expansion. In addition, industrial metals experienced noteworthy increases within the past 24 hours.

The upcoming OPEC+ meeting in Vienna is of particular importance to the oil market. Various high-ranking officials of oil-producing nations have been expressing concerns regarding production targets.

The lack of coherence between the commentary and the gathering is intriguing and deserves attention. The announcement of a production cut by the cartel in early April led to an increase in the price gap for oil.

The forthcoming week may commence with unstable market conditions due to the headlines generated by this assembly.