Oil price climbed today after Iran said it has good expectations for a make-or-break OPEC meeting on stabilizing the crude market. Crude and Oil skyrocketed on expectations that the Organization of the Petroleum Exporting Countries will deliver an agreement later today on production cuts. Reports that OPEC Secretary General Mohammed Barkindo stated that a deal to balance the struggling market will be made also contributed to today’s oil price rally. Crude Oil added 4.4 percent for the day and was last seen trading at $47.22 while Brent Oil added as much as 5 percent but was last seen trading 4.8 percent higher at $49.59 as of 10:10 GMT!
An OPEC deal would be aimed at reducing the global oversupply of oil that has severely depressed prices for the past two years while the proposal would have the group cut production by more than a million barrels a day, representing about 1% of the global oil supply. Finally, it is important to note that Goldman Sachs has stated that if OPEC reaches an accord on production, prices could rise to a range of more than $50-a-barrel while if no deal is reached, oil prices could plunge to as low as below $40 a barrel!
The dollar edged even higher today as U.S. Treasury yields resumed their rally after three bearish days, with the greenback on track for its strongest performance against the yen in seven years! The U.S. dollar hit its highest level against a basket of major currencies since the last 14 years last week, after a boost from Donald Trump’s win that drove debt yields higher on expectations for a higher inflation and a faster pace of monetary tightening.
The dollar has added 8 percent versus the yen since the start of November which marks the strongest month since December 2009! It is worth noting that the greenback was further boosted by robust data on Tuesday that saw the U.S. third quarter GDP revised higher and revealed a stronger than expected consumer confidence for November!
The dollar was last seen trading 0.6 percent higher against the yen for the day at 112.98 JPY as of 10:05 GMT. It’s also worth mentioning that investors will be looking closely for the U.S. Non-Farm Payrolls on Friday which is expected to have a significant impact on the price of the dollar. A strong NFP will cause the dollar to climb even higher against the yen!
European shares fluctuated in early trade today as investors awaited the outcome of a highly-anticipated OPEC meeting later in the day and as BoE (Bank of England) warned of post referendum dangers! BoE suggested that risks to U.K.’s financial stability could materialize. Upbeat German data and a rebound in oil prices offered some support for the European Markets which were last seen trading higher. Indicatively, Germany’s DAX was last seen trading 0.2 percent higher at 10642.00, U.K.’s FTSE 100 added 0.3 percent at 10644.00, France’s CAC 40 added 0.3 percent at 4565.50 while the Euro Stoxx was last seen trading at 3046.00, having added 0.4 percent for the day as of 10:15 GMT.
Among major market players Linde AG shares soared 7.5 percent as the U.S. industrial gas group Praxair resumed discussions with the German rival concerning a potential merger of equals. Plane maker Airbus also added half a percent after announcing it would cut 1,164 jobs as part of a restructuring plan announced in September.