OPEC turns to Nigeria and Libya

It’s quite remarkable how the supply cut exemptions from some OPEC members have come back to punish the cartel, as production in June climbed to the highest level so far in 2017.

With the increasing output from Nigeria and Libya threatening to disrupt efforts made by the rest of the group to rebalance the markets and not being something that was priced in, the price of oil could remain under pressure. There are reports of a possibility that OPEC will ask both Nigeria and Libya to cut production and while these might read as desperate, increased production from both nations was likely not factored into consideration when OPEC agreed to extend its production cut. With the oversupply dynamics still weighing heavily on the mind of investors, the price of oil remains under pressure as oversupply remains the name of the game when it comes to price fluctuations

Although June’s “Goldilocks” report may inspire Dollar bullish investors, the upside could still face headwinds as the lower inflation levels suggest a slower pace of monetary changes from the Fed. With the economic calendar fairly light, price action may dictate where the Dollar Index trades with bulls eyeing 96.40.

Investors will be paying very close attention to Janet Yellen’s testimony on Wednesday and Thursday for clues on when the central bank plans to unwind its balance sheet and raise US interest rates in the second half of 2017.

It will be interesting to hear Yellen’s thoughts on the latest jobs and inflation data and if she maintains her hawkish tone. metal.

With June’s mixed jobs report supporting expectations of the Fed taking action this year, bears seem to be back. It will be interesting to see how prices react to the $1,200 support and if buyers use this opportunity to propel the metal higher.

From a technical standpoint, the yellow metal is coming under increasing selling pressure on the daily charts. A break below $1,214 may encourage a further decline towards $1,200.