OPEC, G20 meetings important for oil

Daily Analysis - 28/11/2018

Oil prices got a small boost today

On Wednesday oil prices increased in anticipation of the OPEC meeting which is going to take place next week. Meanwhile, the producers are thought to choose some form of production cut in an effort to counter an emerging glut. According to traders, the closedown of UK's biggest North Sea oilfield for improvements also helped oil prices.

U.S. West Texas Intermediate crude futures were at about $52.10 per barrel higher 55 cents from their last close.

International Brent crude oil futures went up 57 cents, to $60.77 per barrel. Notwithstanding today's growth, oil prices have yet dropped more than 25% from value since early last month, pulled down by an increasing stock extension and by general instability in financial markets.

Gold has changed little

Spot gold held steady at $1,213.70 per ounce having dropped to its weakest level since the beginning of this month at $1,211.30 in the previous session while U.S. gold futures were down about 0.1% to $1,213.

On Wednesday Gold prices were moderately constrained by a strong greenback after a senior U.S. Federal Reserve official affirmed that there is a demand for an additional hike in interest rates. This will be more costly for owners of other currencies.

On Tuesday Fed vice Chair Richard Clarita said that the central bank probably will proceed to steadily increase interest rates but it is very important to watch the economic data closely while this policy is approaching a neutral stance. John Sharma an economist with National Australia Bank said “The strength of the U.S. dollar has been bad for gold, while the Fed is a little more bullish about interest rates."

Asia markets trade higher while waiting on G20

This afternoon Asia markets moved generally to the upside following an unadventurous morning start, while traders anticipate the meeting between U.S. President Donald Trump and Chinese leader Xi Jinping later this week. Hong Kong's Hang Seng index advanced 0.90% while the Chinese markets remained in a confident area by the close of this morning trading session. The Shanghai composite raised by about 0.84 and the Shenzhen composite retrieved from its initial damage to improve by 0.9%.

U.S. is in a positive attitude

The president of the United States seems to be in a strongly positive attitude. Yesterday he indicated that the demand of US car rates on all transportations apart from the Mexican and the Canadian motors remained the same and possibly will come to effect as early as next week. This indicated a precise warning to Europe to speed up with the negotiation process. Another translation to that is that Trump can handle China and Europe and he is not afraid. It has been generally stated that the US president's gauge of accomplishment is the S&P 500.