The oil market experienced the sharp decline. That was happened on the second level of sales hour in the United States. The WTI contract falls under $61.00 to a point under the level of $59.00. Before, that commodity was recovered really well.
Oil was able to touch the $59.50. It means that WTI lost for about $1.0 or 1.6 percent in that session. The market commentator relate the OPEC+ concern with the sharp decline of raw oil prices on Wednesday. It is especially in the second period of the sales.
The Joint Ministerial Monitoring Committee (JMMC) of the OPEC+ met on Wednesday. For your information, they always meet to prepare that organization and often gives any recommendations of policies for the leaders. However, it was reported that the result is negative.
Some Concerns Appear in that Meeting
It was reported that there are some concerns expressed in that JMMC Meeting about the compliance and compensation deduction. The raw oil has a lot of stocks and still needs to be compensated by the OPEC+ members since the May 2020. A senior official informed something.
He said the information about the current rollover. However, the production cut will be the best option and most of the analysts still hope that the thing will be happened. Elsewhere, France declared the new national lockdown decision taken there.
That lockdown may be done for about a month. That situation is not helping the increase of raw oil. The declaration from the France President, Emmanuel Macron, where he made the lockdown decision officially. That was made at the same time with the sales pressure.
That newest announcement can push a further revision which is below the growth prediction of oil demand for this year. Finally, the raw oil market just see the very limited reaction to the weekly EIA amount of stocks which is so diverse so far.
The API Stocks and It’s Details
The raw oil stock noted the surprising withdraw of 876 thousands barrels versus the expectation increase of 107 thousands. That was similar with the API report. The stock of oil noted the massive withdrawal of more than 1.7 million barrels.
However, the Distillate inventory showed the bigger increase than what people are expected. That was more than 2.5 million barrels. The Cushing stock also increase and the production of the US crude oil was up to 0.1 million barrel per day.
So, it becomes 11.1 million barrel. The price of gold was consolidated around $1680 in a sale lately after the prices decreased under the level of $1700. It means that gold has been slipped by almost $30 or 1.7 percent in that session.
It seems that the precious metals have found some supports to the low monthly level before. That was right under $1680. A breakthrough under this level will open the door for the lowest moving support in May 2020. That was around the level of $1670.
The Increase of a US Obligation
The increase of the American obligation result is the initial catalyst behind the gold declined under $1700 on Tuesday. The step back obligation result in a trade lately, the speed of the sales actions have been decreased. How about the USD condition?
The surprising thing is that USD is continued to sell with the positive bias after a sequence of strong US data release. The prices of houses there are increasing by 12% this year. It is supported by the low interest rate circumstances around.
The inflation level of a high house’s price is not becoming a point of attention. It is especially for the policymakers in the Fed organization. They thought that America needs the higher inflation. However, the house price has a good impact on economy.
