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Market Update

EncoreFX’s daily market updates are written by our experienced and professional dealing team.

91% Compliance in OPEC Deal; Market Awaits US Oil Inventories

Published February 8, 2017
  • Oil prices fell to three week lows earlier this morning after data showed a larger than expected US oil inventory stockpile; oil has since retraced some losses
  • President Donald Trump issued an order to expedite the controversial Dakota Access Pipeline despite sharp resistance from environmentalists and Native American Tribes
  • The 1,885 km pipeline will move crude from shale oil fields in North Dakota to Illinois, which would then move to the Gulf of Mexico for refining; construction could resume as soon as June 2017
  • Data on oil production showed that 91% of OPEC members are complying to their respective cuts as part of the OPEC deal; Iraq was the sole country to be producing significantly above their allocation
  • Saudi Arabia, Angola, and Kuwait all cut production in excess of their allocations which has somewhat help offset overproduction from Algeria, Gabon, Qatar, Venezuela, and Iraq
  • The market, however, seems to have largely priced in compliance within production levels and now looks to government data on US Crude Oil Inventories later this morning at 10:30 AM EST
  • The euro showed losses against the US dollar for the third day in a row on Wednesday; growing political concerns over Brexit and Dutch, French, and German elections have put the euro under pressure

Chart (1) Reuters Poll: Expected Moves Against the USD (Year-to-Date)