OPEC+ unexpectedly does not increase production International oil prices are pushing $65 Copper, nickel and gold are down

The Organization of Petroleum Exporting Countries and partner countries (OPEC+) meeting after the unexpected market decision to maintain unchanged production, pushing Crude Oil prices Thursday (4) rose sharply, West Texas crude rose to a near two-year high. The oil countries are not prepared to increase production, representing a tightening of supply in the crude oil market in the coming months; oil prices are also rising for the global economy, which is recovering from the new crown (Chinese communist virus) Epidemic, increasing inflationary pressures. OPEC+ chose not to ease supply restrictions, frustrating the market’s reversal of expectations, following West Texas Intermediate (WTI) rose 4.2% on Thursday, and rose 0.8% in early Asian trade on Friday, pushing $65 a barrel. OPEC+ agreed to keep production unchanged in April, while Saudi Arabia said it would maintain its voluntary production cut of 1 million barrels per day.

Copper, nickel and Gold prices weakened on Thursday. Copper prices fell the most since March last year, and nickel prices extended their losses, as the market now accelerates its sell-off in industrial metals that had been soaring in recent weeks. U.S. Federal Reserve Chairman Ball did not strongly oppose the rising cost of long-term borrowing, the U.S. bond yield soared causing gold prices to touch a new eight-month low.

Bloomberg notes that OPEC+’s resolution on Thursday was a victory for Saudi Arabia. OPEC+ has been debating whether to resume production at 1.5 million barrels per day, but after Saudi Arabia urged “vigilance”, delegates decided to keep production unchanged at current levels, but allowed Russia and Kazakhstan to increase production slightly.

Saudi Arabia said it is not in a hurry to restore supply and will maintain its voluntary production cut of 1 million barrels per day. Rabobank commodities strategist Ryan Fitzmaurice said, “The Shaudis are shrewdly aware that they need to ‘incentivize the long side’ in order to maintain the recent price momentum and speculative buying interest in oil futures. “

West Texas Intermediate crude rose $2.55 to close at $63.83 a barrel on Thursday, the highest price since April 2019. Brent crude, which at one point jumped 5.7%, closed the session with gains narrowed to 4.17%, up $2.67 to close at $66.74 a barrel, the highest since late February; Brent crude has gained about 30% so far this year.

For the first full quarter, OPEC+ is keeping production below demand levels, with the aim of absorbing the stockpiles built up during the worst of the epidemic. According to internal OPEC+ estimates, without additional supply, the gap between supply and demand will widen significantly in April.

Copper and nickel prices fell due to increased inventories tracked by the London Metal Exchange (LME), easing market concerns over nickel supply, rising U.S. bond yields and a stronger U.S. dollar.

Oanda senior market analyst Jeffrey Halley said that if U.S. bond rates continue to move higher in the next two days, gold will almost certainly not be able to hold support, which will open up the space to slide to $1600 per tael region.