Crude Rises After OPEC Delays Meeting to June

Oil prices rose after OPEC+ cancelled its April meeting and will now meet in June with the fate of their output limit to be decided. The deal spearheaded by Saudi Arabia and Russia has brought OPEC and other major producers onboard in reducing daily production by 1.2 million barrels.

Oil prices have been dictated by how the delicate balance between rising US production and the OPEC+ production limit is broken by external factors. This week the news of the deal continuing without change until June has boosted crude prices.

West Texas Intermediate graph

The two de facto leaders of the OPEC+ appear to be onboard for extending the agreement beyond its June deadline, but will face some resistance from OPEC members who have seen their revenues shrink and do not have the deep pockets to keep tightening their belts.

Energy demand has increased, but its subject to a successful trade agreement between the US and China. Talks of a delay have raised concerns, although both sides remain support of a positive outcome. President Xi and Trump were expected to meet this month, but that meeting might not occur until early June.

Brent crude graph

The OPEC+ deal has brought stability to crude prices and signs of an extension have taken crude higher, the ball is now on the US production side with the weekly crude inventories an upcoming indicator to be taken into consideration when its released on Wednesday.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza