OPEC Intrigue, Awaiting Data from NFP and Buying Dollar

2 ก.ค. 2021

The main event of yesterday was the OPEC + meeting. Quite a lot has been written about it this week. Therefore, we will not repeat ourselves and move on to its results. More precisely, to their absence.

Everything seemed to be heading towards an increase in oil production of 400,000 barrels per day every month from August to December. At least, such a consensus was reported by sources from the camp of the negotiators. But literally a minute before the announcement of the final decision, the United Arab Emirates blocked the deal because they were not satisfied with their own production quotas, which they wanted to expand.

On the one hand, this news seems to be exclusively bullish for oil. Since the absence of a deal means maintaining the status quo, which today means a significant deficit in the oil market.

On the other hand, recalling the spring of last year, buyers have more than serious reasons for concern. Because last year the lack of agreement between Saudi Arabia and Russia led to a price war in the oil market and prices went into negative territory.

In total, OPEC + should get together today to find a compromise. So the intrigue drags on.

The main event of the week for the financial markets in general, the dollar and the US stock market in particular, is the publication of monthly statistics on the US labor market. Traditionally, on the first Friday of every month, we receive a whole block of data, which includes such indicators as NPP, unemployment rate and average hourly wages.

There are enough reasons to expect good data. Starting from the overall current form of US savings, ending with the confirming figures from the ADP (they came out almost 100K better than forecasted), as well as the dynamics of the number of vacancies in the United States, which, according to the latest data, reached an all-time high of 9.3 million. At the same time, the monthly growth rate was +998,000 (!). And jobless claims have been coming out quite decent lately. Yesterday, for example, the indicator for initial applications was 364K, which is the lowest level since the beginning of the pandemic.