The price of oil rose on Tuesday as markets await an agreement from the OPEC+ meeting on a major production cut that will temper the impact of worries about the global economy.
Why is oil rising today?
Oil prices jumped more than $3 on Monday amid reports that OPEC+ will consider production cuts of nearly 1 million bpd at the cartel’s first off-line meeting since 2020 on Wednesday.
Brent crude futures rose 0.54% to $89.34 a barrel, while WTI crude rose 0.43% to $83.97 a barrel.
Voluntary reductions in oil production by individual OPEC+ member countries will be counted on top of the overall agreed quota cut, which could be the largest reduction since the pandemic began.
“Despite everything going on in Ukraine, OPEC+ has never been stronger, and they will do everything they can to provide price support,” OANDA’s Edward Moya wrote in a research note.
“While OPEC+ may be announcing a production cut of more than 1 million bpd, in reality the cuts could be much smaller. This is due to the fact that most OPEC+ members are already well below target levels,” ING analysts said in a note.
Rising prices may be limited by concerns about the state of the world economy and the desire of investors to lock in profits from the previous session, said Tina Teng of CMC Markets.
Earlier we reported the most important Forex news for October 3.
Eurozone annual inflation rate slowed to 10% in November
Eurozone inflation rate rose 10% now. Inflation has slowed down from 10.6% in October, when the rate was at its highest since the start of calculations. Analysts polled by Trading Economics had expected inflation to slow to 10.4 percent.
Eurostat Eurozone inflation – current data
Consumer prices declined by 0.1% compared to the previous month. Consumer prices excluding volatile factors such as energy, food and alcohol (CPI Core Index tracked by the ECB) rose 5% year-on-year in October after rising the same amount in October.
Energy prices slowed to 34.9% in November after rising 41.5% in October. Manufactured goods prices rose 6.1%, the same as a month earlier. The U.S. is about the same, putting pressure on stock markets and even Apple stock prices today.
The cost of food, alcohol and tobacco products rose 13.6% after an increase of 13.1% in October. Services rose 4.2% (+4.3% a month earlier).
The highest inflation in annual terms was recorded in Latvia (21.7%), Estonia, and Lithuania (21.4%). The lowest price growth was observed in Spain (6.6%), France (7.1%) and Malta (7.2%).
Earlier we reported that the dollar is getting cheaper against major currencies.
Dollar is getting weaker against major currencies
The dollar is getting weaker against major currencies in trading Thursday morning after U.S. Federal Reserve (Fed) Chairman Jerome Powell spoke the day before.
During a speech at the Brookings Institution on Wednesday, Powell reiterated that the Fed could slow the rise in the benchmark rate as early as December. “The time to moderate the pace of rate hikes may come as early as the next meeting,” Powell said.
The Fed chair, meanwhile, tried to balance those words with “hawkish” signals. Market Watch notes. He said that the U.S. Central Bank will have to raise the rate higher than could be expected a few months ago. Also, Powell made it clear that the issue of rate cuts is irrelevant at the moment. Against this background, the stock market and Tesla stock prices today in particular rose.
Another Fed official, Board of Governors member Lisa Cook, is confident that the regulator needs to keep raising the rate because inflation is still too high. “We’ve started to get more favorable inflation data. But I would be cautious about drawing big conclusions on just one month’s worth of data,” Cook said during a speech at the Detroit Economic Club.
Is the dollar going to crash? It’s premature to make such statements. So far, the euro has gained 0.36% against the dollar to $1.0443 against $1.0406 at the close of the session on Wednesday. The dollar/yen exchange rate declined 1.14% to 136.50 yen from 138.07 yen at the end of the previous session. The pound gained 0.31% to $1.2095against $1.2058 the day before.
The ICE-calculated index showing the dynamics of the US dollar against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona) is down 0.4%, while the broader WSJ Dollar Index is losing 0.6%.
Earlier we reported that unemployment in the Eurozone fell to 6.5% in October and in the EU to 6.0%.
The unemployment rate in the eurozone decreased to 6.5% in October, to 6.0% in the EU
The unemployment rate in the Eurozone was 6.5%. The index has fallen to a record low level in the history of its calculations. In September 2022, the unemployment rate was 6.6%. Analysts had expected the unemployment rate to remain at the September level of 6.6%, according to Trading Economics.
Eurozone unemployment fell to 6.0% from 6.1% a month earlier. There were 12.953 million unemployed in the 27 EU countries in October, of which 10.872 million were in the eurozone. Compared to October 2021, the number of unemployed fell by 1.158 million in the EU and 1.053 million in the euro area.
In October, there were 2.872 million unemployed young people (under 25 years of age) in the EU, of which 2.326 million were in the euro area. The youth unemployment rate in the EU and the euro area was 15.1% compared to 15.2% (EU) and 15% compared to 15.2% a month earlier (euro area). In the U.S., the situation is similar, which puts pressure on stock markets and in particular on NVIDIA stock prices today.
Among EU countries the lowest unemployment rate in October was registered in Czech Republic (2.1%), Poland and Germany (3.0%), Malta (3.1%) and the highest in Greece (11.6%) and Spain (12.5%).
In France, unemployment remained at 7.1% and in Italy dropped to 7.8% from 7.9% in September.
Earlier, we reported that the Chinese stock market closed in the negative amid protests in China.
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