Today the fate of the oil market rests in the hands of the United States government, and mostly President Trump. Russia and Saudi Arabia have decided to set aside their differences for now and are meeting together with the rest of the OPEC+ countries to discuss deep production cuts to help stabilize the heavily oversupplied market.
However, OPEC+ members expect the United States, who has never backed their plans, to support the agreed policy this time around and join other oil exporting countries in upholding the production cuts. While Donald Trump previously boasted that he knows for certain that a deal is coming, he has not stated whether the United States will be backing it or not.
A massive production cut of 10-15 million barrels of oil per day is expected to be proposed, but some analysts believe that even that record amount will not be enough to balance the market. Recall that oil recently dropped to an 18-year minimum around $20 per barrel. The hopes for a new deal between oil exporting countries has brought prices above $30, but still far lower than the $60 range they were trading at before the coronavirus pandemic.
Meanwhile, on the Covid-19 front, things remain serious. The world surpassed 1,5 million cases this week. France, which is quite heavily affected, announced that the lockdown will continue even after the Easter holidays. Germany is seeing increases in new Covid-19 cases but still plans to scale back the safety measures after the holidays. The United States has close to one third of the total number of coronavirus patients in the world and has still not reached the peak of the outbreak.
Today we expect the weekly initial jobless claims from the US. Last week’s report rattled the markets as we learned that more than 6 million Americans became unemployed in just that week. This week’s data is expected to be lower, but still staggering.
