The U.S. will extend its oil production of 12M barrels per day

Daily Analysis - 12/06/2019

Despite low oil prices the U.S will continue with the same production


According to U.S Deputy Energy Secretary announcement on Wednesday, the U.S. will persevere with its oil production notwithstanding the low oil prices and the decreasing economic growth.

U.S. producers will remain with the same production pace and they will continue to produce 12 million barrels a day through next year. They may even raise the production as high as 13 million barrels, he added. U.S Deputy Energy Secretary told CNBC “U.S. production numbers are going to continue for quite some time”. U.S.WTI crude futures dropped nearly 20% since touching their 2019 tops in April, while oil was pulled down by raising fears of an economic downturn that’s begun to affect oil consumption.

Risk appetite falls, gold recovers

On Wednesday Gold prices increased following a touch of its 7-day low in the previous session. The recovery came while concerns covering U.S.-China trade conflict increased, restricting risk demand and improving the interest of the popular safe-haven metal. The U.S. gold futures went up 0.4% to $1,336.59 an ounce.

The Spot gold surged 0.5% to $1,333.05 after dropping to its weakest level since the start of this month at $1,319.34 in the last trading session.

An analyst with Singapore-based Phillip Futures said

“Market sentiment this morning is very cautious and risk appetite has started to diminish gently, therefore we see a little bit of buying in gold”.


Weaker demand drove oil down more than 1%

On Wednesday Oil prices dropped more than 1%, pulled down by a lower oil demand and an increase in U.S. crude inventories notwithstanding the increasing expectations of continuing OPEC-led supply cuts.

U.S. WTI crude futures fell 85 cents to $52.41 per barrel while Brent crude futures dropped 87 cents, to $61.40 a barrel.


U.S dollar near 3-month lows

On Wednesday the popular greenback was near a 3-month low versus its rivals pressed by expectations that the U.S. Fed may lower the interest rates in the next months.

The index was under tension after a sharp drop in the long-term U.S. Treasury yields that drove the popular index near its two-year lows. That came after a weak U.S. jobs report that boosted the expectations for an interest rate cut by the Fed on Friday.

The dollar index versus a box of six main currencies was flat at 96.706 trading barely above the 96.458 level it hit on Monday.


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