Free Trial

Oil Surges On Opec+ Cut, Initial Greenback Strength Wanes

EMERGING MARKETS
  • Oil surged at the week’s open after OPEC+ unexpectedly announced crude output cuts that threaten to tighten the market, delivering a fresh inflationary jolt to the world economy.
    • The surprise Opec+ production cuts further strains US relations with Saudi – a move which US officials have called unadvisable. "We don’t think cuts are advisable at this moment given market uncertainty - and we’ve made that clear," a spokesperson for the National Security Council said.
    • The cuts of an additional 1.66 million barrels per day plus 500,000 bpd from Russia till year end have pushed crude prices by over 5% today.
  • With the initial impact on core rates, the JPY came under immediate pressure at the open and USDJPY swiftly traded back to 133.50 on the news. Further greenback strength filtered through to currency markets which saw the USD index trade up roughly half a percent as the European session began.
    • Since then, as government bonds have recovered off their worst levels and equities remain buoyant, the greenback has relinquished these gains to trade marginally back in the red. Notable bounces for the likes of EUR, GBP, CAD and AUD which are all now registering gains between 0.2-0.5% on the day.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.