Forex Marketz Daily Forex News – Fully Markets Update
Crude oil futures contracts have climbed higher during the Asian trade session on Tuesday. Sentiment and price action were supported after Saudi Arabia, the de-facto leader of the Organization for Petroleum Exporting Countries (OPEC) said they would further cut back on production.
Saudi Arabia is worried about the growing supply glut and decrease in global demand which is keeping prices depressed.
As of 12:20 am GMT, the international Brent crude oil futures contract was trading as high as $30.10 per barrel. At last glance the Brent contract was up 28 cents to fetch $29.91 per barrel. This contract had shed $1.34 during the North American trade session on Monday.
The U.S. West Texas Intermediate (WTI) crude futures contract, for front end delivery, gained one percent to trade at $24.38 per barrel. This was slightly down from a high price point at $24.77 per barrel.
Crude Oil Traders Digest OPEC Production Levels
Overnight, Saudi Arabia, in a surprise announcement said that they would cut production by another one million barrels per day by the first of June. This would bring their total production to 7.5 million barrels per day. A decrease of 40 percent since April.
The United Arab Emirates and Kuwait also committed to cut production in further. They pledged a cut of 180,000 barrels per day on top of already in place cuts.
Private economic data concerning U.S. crude oil inventory data will be watched closely. Their inventory likely rose by 4.3 million barrels for the week that ended 8 May. This will be released by the private American Petroleum Institute (API) industry group.
Traders Watch a Rise in Covid-19 Cases in Asia
There are a rise of new Covid-19 cases in Asia. Traders will be monitoring reports of a possible second wave of this global pandemic getting underway.
This contagion has already brought the global economy to a near standstill, restricted travel and choked off trade routes. This has cratered the demand for oil and swollen inventory levels.
Both China and South Korea are reporting news cases of the coronavirus. These could result in further lockdowns in the region.
