Oil Price Tumbles Despite Deal to Extend Output Cut

Oil

Oil prices fell as much as 5% yesterday after OPEC and other major exporters including Russia extended their current agreement to reduce oil production for 9 months, leading to traders disappointment who were expecting deeper cuts.

Meanwhile, Khalid Al-Falih, Saudi Arabia's energy and industry oil minister said, “Nine months with the same level of production that our member countries have been producing is a very safe and almost certain option to do the trick."

• S. crude fell to $48.60 yesterday and could decline further to $47.50. However, prices could re-test $50 during the next period.

GBP

The Sterling pound failed to manage its gains as UK economy declined by 0.2%, recorded as slower than expected in first quarter 2017.

Cable is trading under pressure, as the country will go to the polls in a general election after two weeks. Technically, GBP could decline further to $1.27 vs. USD during the next period.

USD

The U.S. dollar index (DXY), which measures the greenback against a basket of currencies, managed to recover to 97.15 pips after OPEC agreement.

Gold

Gold prices settled yesterday, despite a strong USD. While markets are awaiting the release of revised first-quarter U.S. GDP figures as it could be upgraded to 0.9% from the initially reported 0.7%.

The most important economic events:

• USD Gross Domestic Product (Annualized) (1Q S): (GMT 12:30) – Important – Forecast (0.9%) – Previous (0.7%).
• USD Durable Goods Orders (APR P): (GMT 12:30) – Important – Forecast (-1.5%) – Previous (0.9%).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.