The main event of the week for the oil market was the OPEC Plus meeting results announcement. Despite the growth in oil prices, the OPEC Plus decision can hardly be called bullish. OPEC Plus members have agreed to increase production by 350,000 bpd in May and June and by 400,000 bpd in July. Yes, this is less than the initial 500K bpd, but this is not a preservation of the status quo, but an increase in supply. If we consider that the USA, apparently, is coming out of hibernation (the US crude oil exports jumped to 3.2 million barrels per day, production last week increased to 11.1 million barrels per day), and the third wave of the pandemic becoming more confident covers the world, we have such a bearish combo for oil. All in all, current oil prices are an excellent selling opportunity.
One of the reasons for the rise in oil prices is the belief in a fast US economic recovery and a sharp jump in oil demand. Biden, with his infrastructure plan, fits perfectly into this concept. The problem with Biden and his plan is that it can take months or even quarters from idea to adoption. The Republicans have already said they will never support the plan. And this means that it may have to be split into parts and separate components to be dragged through Congress. In general, experts do not expect anything before autumn starts.
Today will be a day off for many developed countries, so some markets will be closed. It’s a partial day off today in the United States, but this will not prevent the publication of official statistics on the US labor market. Much is expected from NFP figures. Maybe, even too much. That is, we are waiting for good data, but whether they will reach the 650K expected by the markets is a question. Yesterday's data on jobless claims came out relatively weak and rather gave rise to the idea of some premature over-positive expectations.
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