Crude Oil prices have suffered on the back of OPEC’s 9-month extension to production cuts. Both Brent and US benchmarks have fallen back to 10-week lows at $51 and $48.50 respectively.
Accendo Markets Analyst, Mike van Dulken suggested – “The negative oil reaction to a 9-month OPEC production cut extension is a prime example of ‘buy the rumour, sell the fact’. With nine months having become the baseline – prices +17% in the run-up, hoping for longer and maybe even deeper cuts – potential for an upside surprise was already limited.
If anything, the simple extension begs questions about what happens next March and what OPEC’s long-term strategy is for combating rising US production and a prolonged global supply glut, to get prices back above $60.”
A lack of data meant that the latest UK election news, and the continued reaction to yesterday’s OPEC meeting, dominated Friday’s early trading.
“The most notable move came from sterling, which plunged half a percent against both the dollar, taking cable to a near 2 week low, and the euro, where the pound now sits at its worst price in around 2 months.” noted Spreadex Analyst, Connor Campbell “Any growth managed by sterling since April has largely been predicated on the assumption that the Conservatives would secure a landslide victory. That this presently doesn’t seem to be the case has helped further erode confidence in the currency’s current position.”
US equity markets moved higher for a 6th consecutive session, ignoring falling Crude Oil prices, as major Tech stocks extended recent gains.
Mike van Dulken commented – “Popular growth companies Alphabet, Netflix and Facebook helped lead the Nasdaq to a fresh all-time closing high alongside the S&P 500. The Dow Jones also closed higher, however underperformed relative to peers, with UnitedHealth leading risers on Trump healthcare reform hopes, while Chevron and Goldman Sachs contributed most losses after recent strength.”