Crude futures tumbled on Wednesday, reversing the previous day’s gains, as Reuters reported that the Organization of the Petroleum Exporting Countries and its allies may consider raising output again in October at a meeting on Sunday.
Another boost would mean that OPEC+ would start to unwind the second tranche of production cuts, amounting to about 1.65 million barrels per day, more than a year ahead of schedule.
The organization has agreed to raise its production target by about 2.2 million barrels per day from April to September. In addition, it has increased the production quota of the United Arab Emirates by 300,000 barrels per day.
Most analysts expect OPEC+ to keep its production target for October unchanged, as Russia and Iran are unable to further increase output due to sales restrictions and limited capacity.
Despite expectations of a severe oversupply in the oil market in the fourth quarter of this year, OPEC+ has repeatedly surprised traders with its strategy of regaining market share this year.
Rebecca Babin, senior energy trader at CIBC Private Wealth Group, said in a report, “OPEC has clearly changed its approach this year. While I don’t deny their interest in capturing market share or aligning with Trump, if they were to cancel production cuts due to seasonally weak demand, it would be too hasty.” She added that her base case remains that OPEC will not increase production further.
Technical analysis:
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Gold: Yesterday, the price rose all the way above the 3570 level. Currently, the price has dropped by nearly 1% compared to the overnight high. The ADP employment data will be released in the evening. If the performance is poor, it may continue to boost the gold price. During the day, we will focus on the rebound after the price sweeps the liquidity. After the ADP data in the evening, we will mainly focus on the second rise opportunity of the price. For detailed positions, please consult the plugin.
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Nasdaq: Yesterday, the alert in the blue area of our plugin was very effective in completing the task. We have now achieved a profit-to-loss ratio close to 1:1. For today, it is recommended to reduce the position and set a stop-loss before continuing to hold. If the ADP data tonight continues to support the expectation of a rate cut, the price may rise further. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: Due to the possibility that OPEC may further ease production cuts at the weekend meeting, the uncertainty of oil prices has increased recently. We suggest taking a wait-and-see approach for the short term and waiting for the risk period to pass. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Today’s key economic data and events to focus on:
17:00 Eurozone retail sales for July
20:15 US August ADP Employment Change
20:30 U.S. Seasonally Adjusted Initial Jobless Claims (to 0830) Last Week
22:00 US August ISM Non-Manufacturing Purchasing Managers’ Index
At 23:30, William姆斯， the president of the Federal Reserve Bank of New York, will deliver a speech at the New York Economic Club.
