Oil market is trying to find a direction at the last times in the global forex market. After a negative trend during the month of April, the parity started to follow a fluctuating trend in the first days of May. The crude oil market tested under the 48 USD level at May 3rd. The tax reform and Fed's monetary policy decisions are not clear nowadays, so it creates a negative impact on the global oil market. While the Fed is trying to get out of the easy monetary policy of the Fed, Donald Trump's Presidency does not see the same situation when it raises financial markets. It is obvious that the US economy needs Trump's pre-election commitments to continue its recovery process and the markets do not seem to have much patience. We have come up with tips on the details of the tax reform last week, but we know that the commodity market needs to see its actions.
Despite OPEC's efforts to limit production, production in the US has risen to the highest level since 2015 with the increase in techno-wells. In the second half of the year, as Russia promised by non-OPEC countries, production reached 300,000 barrels. It is also certain that the decision on production will be taken at the May meeting. This time the decision may be challenging, but it seems that there is no other way out to keep prices stable in an environment not supported by increased demand.
- Date: 03 May 2017 Wed 07:32
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