The OPEC+ meeting originally scheduled to be held on Monday was postponed to Thursday, once suppressing the oil prices. Currently, the oil prices tends to be stabilized, which the WTI crude futures is trading around $27 level. Before any news of the production cuts, it is likely that the oil market will consolidate at the current range.
The risk appetite is maintained on Tuesday, and the dollar index fell back to around 100 level. At present, the three major US stock index futures all rising more than 1%, reflecting that market sentiment remains positive.
During the Asian session, the Reserve Bank of Australia announced that it would keep interest rates unchanged at 0.25% as expected, and the Reserve Bank of New Zealand also announced the expansion of the quantitative easing from 30 billion NZD to 33 billion NZD, which will also help stabilizing market sentiment.
Those news are to some extent positive for oil prices, but at the same time, it is cautious that some investors are too optimistic about the production cut agreement. Actually, the production cut agreement by OPEC+ would not be an easy task because the US President Trump has not expressed his willingness to participate in the agreement.
Although other oil-producers such as Canada and Norway have indicated that they are willing to participate to stabilize the oil market order, the market has summarized that “Bloomberg” and “Reuters” news, showing that Russia and Saudi Arabia are ready to significantly cut the production, but the condition is the US cooperation.
Most of the analysis believes that if no agreement can be reached in Thursday’s meeting, which may be seriously shocking the market, the oil prices are likely to fall again to around $20 level, causing the financial market turbulence again.