Oil group and non-oil group oil-producing countries decided to extend the current daily production cuts by July
After the past weekend’s meeting, the oil group plus non-oil group oil-producing countries agreed to extend the current daily output reduction of 9.7 million barrels by more than January to the end of July. Since countries such as Nigeria and Iraq did not make real production cuts in response to the request of the oil group during the production cuts in May and June, they will make up the amount they should reduce in May and June in July. Before the oil group met, some analysts had estimated that the oil group might extend the production cut to the end of August. But now only for the end of July, it seems that the oil group does not want to push up the oil price excessively, especially it does not want the oil price to return to the level of 50 US dollars, so that American shale oil will have a breathing opportunity.
Economic recovery is expected to suppress gold
Last Friday, the non-farm payrolls data was much better than expected, which strengthened the market’s expectation of the recovery of the US economy. At the same time, traders gave up negative interest rate bets, and the plunge in gold triggered a stop loss that led to further selling of gold. Contagion risks still exist, while international trade tensions may delay the pace of global economic recovery, and therefore also support the price of gold. The most important thing is that the continued massive global easing will eventually lead to inflation, which is also beneficial to the price of gold. This week, focus on US CPI data and Fed resolutions.
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