Crude oil prices jumped 3% on Friday, gaining support from the promise of the OPEC+ alliance members to meet their supply cut quotas, improving the rebalancing in the energy market. Both crude oil contracts trade above $40 per barrel for the first time after they dropped at early June due to the resurgence of COVID-19 cases around the world.
Global cases: More than 8.46 million
Global deaths: At least 453,216
U.S. cases: More than 2.18 million
U.S. deaths: At least 118,386
WTI and Brent crude oil prices rallied by more than 3% at $40 and $42.70 per barrel respectively during the early Friday’s US trading session.
The ministers of OPEC+ alliance met yesterday, where Iraq and Kazakhstan promised to meet their quotas agreed to the output cut deal back in May, to support the recovery of oil prices after pandemic. The OPEC+ alliance agreed to extend its record production cut of 9.7 million barrels per day (bpd) or 10% of global supply until end of July.
The recent jump in the oil prices overshadowed the worries for a second wave of virus infections in US and China, which could damage the recovery of the demand for petroleum products.
US futures advanced 1% on Friday morning in response to the plans of China to step up purchases of US farm goods to comply with the Phase One trade deal following the talks in Hawaii this week. The purchases were delayed in the previous months due to the pandemic disruption.
Meanwhile, the US stock markets closed slightly lower on Thursday, after the higher than expected initial U.S. jobless claims of 1.508 million. Furthermore, the market sentiment deteriorated after the states of Arizona and Florida reported record spikes in coronavirus cases.
Asian markets finished the last day of week with gains after a Chinese health expert said that the recent virus outbreak in Beijing was under control. However, the South Korean index was under pressure due to rising concerns about diplomatic tension with North Korea.
The DXY-US dollar’s index climbed near two-week highs against a basket of currencies, as concerns about the resurgence of pandemic cases and escalated geopolitical tensions supported demand for safe-haven currencies.
The EUR/USD pair dropped near key support level of 1.12, amid Euro weakness. The forex investors doubt whether the European Union would be able to pass an ambitious stimulus plan of 750 billion euros proposed by the European Commission, given that some countries including Denmark and Austria are opposed to handing out aid as grants.
Economic Calendar for June 19, 2020 (GMT+ 3:00):
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