OPEC Cuts Deep; Strength In The Ruble
eToro | Dec 12, 2016 09:55
Today's Highlights
OPEC Cuts Deep
Mind the Gaps
Strength in the Ruble
Please note: All data, figures & graphs are valid as of December 12th. All trading carries risk. Only risk capital you're prepared to lose.
The Oil Bandits
Over the weekend, the infamous cartel got together with a few old friends to curb the price of black gold. In addition to the cut of 1.2 million barrels per day announced by OPEC two weeks ago, 11 non-OPEC members committed to reducing their production by a collective 558,000 bpd.
After the meeting, the head honcho of OPEC, Saudi Arabia, said that they will be looking to cut even deeper than previously expected come January. Needles to say, the price of Texas Tea opened trading this week with a huge gap and is now sitting comfortably at $54.80.
Not bad for a bunch of smooth talking hombres. However, even the biggest and baddest of them have their fears. In this case, it's the producers of the west known as shale. Even with the 11 countries added to their posse, OPEC still controls less than half of global production. You better bet that everybody who isn't part of this deal is going to be drilling to their heart's content.
Market Overview
As the markets look forward to the impending rate hike on Wednesday, the stocks around the world continue to rise. Asia is off to a great start of the day with all the indices rising except China.
The US dollar has continued climbing her stairway to heaven with the dollar index back near 101.50. With that, the Japanese yen continues its devaluation with the USD/JPY already at 115.84, as of this writing.
Gold and silver are starting the week on the back foot, but what else is new.
Just like oil, the EUR/USD also opened the week with a gap. Though the gap was quite small, it could prove significant. With 82% in eToro currently buying, every move closer to the 1.05 level is very concerning.
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From the Ruble
One more thing to watch today, and overall since the US elections a month ago, is the Russian ruble. Donald Trump is reportedly considering Rex Tillerson, a good friend of Russia, for Secretary of State.
Tillerson aside, Trump's love for Putin is no secret and it seems increasingly likely that the Crimea Sanctions that nearly halved the value of the ruble since 2014, could be reduced drastically in the coming months.
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