Crude oil has seen a resurgence in volatility as it moved sharply up after what markets deemed to be a bullish OPEC meeting in which, it appears, for now, that the OPEC members are close to implementing supply cuts. Crude is trading at the all-important resistance level of 50 USD, which it broke through after yesterday's US Crude Oil inventories showed a larger draw down in inventories as I printed -3M vs an expected increase in 1.1M, implying that demand has caught up and that any excess oil supplies might have a market after all.
Combine the two, and assuming all else remains equal, you have a catalyst for higher oil prices. However, any data showing a decrease in demand for oil or any comments by any oil producing nation regarding an increase of supply or a disinterest in maintaining any quotas which may arise from OPEC, will see the recent gains erased as the true nature of falling demand and increasing supply return to plague oil prices.
Today's key economic figures:
- German Factory Orders m/m expected at 0.3%
- ECB Monetary Policy Meeting Accounts
- Building Permits m/m expected at 1.1%
- Gov Council Member Wilkins Speaks
- Unemployment Claims expected at 255k