Oil shines as OPEC cuts, gold eyes NFP

Oil rallies 10% this week amid OPEC+ cut

Oil prices appear to have steadied after bursting higher over the last week in anticipation of and reaction to the massive production cut announced by OPEC+ on Wednesday. Brent and WTI are more than 10% higher on the week after the alliance cut output targets by two million barrels per day.

While the net effect will be much smaller, maybe half or less, due to the inability of numerous members to actually hit previously agreed targets, it is still considerable. With Brent now firmly back in the $90-100 range, the group will likely be pleased with the outcome although substantial uncertainty remains over the economic outlook that could ensure prices remain highly volatile.

Gold steady ahead of the jobs report

Gold is trading relatively flat heading into the jobs report which is perhaps not too surprising. The yellow metal was enjoying a solid rebound up until the middle of the week when the mood changed. But it remains above $1,700 and now the focus is on whether the US can deliver another hot jobs report. If it does, gold could find itself out of favour and back below $1,700 again while a softer report, particularly on wages, and higher participation could help add to gains from earlier in the week.

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam