In our global markets podcast this week we host our esteemed analysts; Gaurav Kashyap in Dubai and Mark Lee in London. The Chat as the week begins is on crude oil and the landmark OPEC+ deal over the past weekend.
This will be a shortened trading week as several markets observed Easter festivities on Monday. Crude markets opened higher on Monday following the announcement of a landmark OPEC+ deal. During the four day negotiations, 23 countries led by United Staes, Saudi Arabia, and Russia ratified to cut production by 9.7 million BPD.
Mark ” the OPEC+ deal is a great turn around and puts an end to the devastating price war between Saudi Arabia and Russia. These signs of collaboration and compromise are very positive as the nations implement the deal.” The US oil and shale industry will save thousands of jobs and protect the domestic oil industry in an era of stable prices.
However, Mark feels that the cut is not enough to avert the diminishing demand that has been made worse by COVID19. Therefore, oil prices are likely to remain relatively low in the short term due to supply and demand constraints. Gaurav expects crude oil demand to fall by 30 million BPD representing a 30% slump in demand.
Key data releases to keep an eye at during the week.
- Tuesday – Chinese trade data with an expectation of contraction in exports and a key indicator of the health of the supply chain
- Wednesday – Bank of Canada key rate meeting – additional stimulus expected to be announced and opportunities for USDCAD which has deteriorated in recent weeks
- Thursday; the US unemployment claims have doubled in the last two weeks.
- Friday – Chinese GDP numbers
