Oil Prices Inch Higher on Optimism over OPEC+ Meeting

Oil

Oil prices edged higher as market participants are slightly optimistic about the results of OPEC+ meeting later today. Oil benchmarks suffered sharp losses since the beginning of the year as the coronavirus outbreak locked cities and suspended the economic activity leading to a significant drop in oil demand levels. On the other hand, in their previous meeting, OPEC and its allies failed to agree on a production cut quota to stabilize the market, triggering a price war. Investors are watching carefully the output of today's meeting to build their positions on it. Several OPEC members stated that they are looking for a production cut of more than 10 million barrels per day. On the other hand, the US Energy Information Administration published the weekly report, showing a record weekly increase in US inventories by 15.177 million barrels. Also, the report unveiled a drop of 600 thousand barrels in production to 12.4 million barrels per day.

Equities

Major US stock-index futures soared on hopes of coronavirus recovery.  The White House Advisor doctor Anthony Fauci stated yesterday that the virus turnaround could likely happen after this week, sparking investors' optimism. On the other hand, stock benchmarks found support from Sanders drop-out of the presidential race. The Dow Jones Industrial Average futures rose to 23597, the S&P500 futures advanced to 2768, and Nasdaq futures rallied to 8272.

USD

The dollar index, which measures the greenback against a basket of major currencies, held steady above 100 as risk sentiment improved. The enhanced risk appetite supported risker currencies such as the euro, pound, and commodity currencies. The EURUSD edged higher to $1.0880, the GBPUSD rallied to $1.2418, and the AUDUSD advanced to a one-month high of $0.6250. US treasury yields were on a better note where the US 10-year yields rose to 0.789%, and the US 30-year yields surged to 1.40%. Market participants are looking forward to the weekly initial jobless claims and Powell's speech about the economy.

Metals

Precious metal prices appreciated post a two-day decline as the dollar eased. The price of a gold ounce rose to $1660, the price of a silver ounce raced higher to $15.18, while palladium futures held steady above $2100.

Major Economic Events

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.COM. 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.