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A negative start for Asian and European markets

A negative start for Asian and European markets .. Oil is declining given OPEC’s decision

A negative start for Asian and European markets .. Oil is declining given OPEC’s decision

A negative start for Asian and European markets .. Oil is declining given OPEC’s decision:

managed finally to reach an agreement, but this was not such a great step,
which were expected to be shocked by the decision, causing them to decline again. 

Evest follows the commodity trading market and relays to you what happened in the following lines.

OPEC’s decision puts pressure on oil

Oil prices fell by about 1% after OPEC + (the expanded group of crude oil producers with the cartel and external members)
reached an agreement on increasing crude oil production, after two weeks of stalemate in negotiations due to a disagreement with the UAE over proposed actions.

At 8.30 a.m., Brent crude futures for September were at $72.89 a barrel, down $0.71 or 0.96%. 

US West Texas Intermediate crude oil futures for September are trading down $1.09, or 0.71٪ to $70.78 per barrel.

OPEC + member countries met on Sunday at a ministerial meeting postponed from the beginning of July, which this time turned out to be fruitful.

OPEC and its 10 allies managed finally to agree on a further increase in their production.

On Saturday, OPEC + drafted a formal agreement that will allow the coalition to increase production every month
by 400 thousand barrels per day from August to at least December to “support the recovery.”

OPEC and its partner countries (OPEC +) agreed to significantly increase oil production over the weekend in light of the global economic recovery.

OPEC announced Sunday, after an online ministerial meeting called shortly, that from August onwards,
the oil alliance will increase its daily production by 400 thousand barrels per month until further notice.

It said if market conditions are favorable, the current production cut would end in September 2022.

The agreement reached yesterday extends cuts scheduled for April 2020 until December 31, 2022.

However, overall production is adjusted upward: OPEC will add up to 400 thousand barrels per day every month from August until production is completely halted.

Monthly meetings

The countries pledged to continue to hold monthly meetings for the duration of the Declaration of Cooperation,
assess market conditions, decide on the next month’s level of production adjustments,
and
endeavor to complete the production adjustments by the end of September 2022. 

The agreement also provides for Saudi Arabia, the United Arab Emirates, Iraq, Kuwait, and Russia with the highest baseline
(ie the level of production at which the cuts were calculated) since May 2022.

West Texas Intermediate crude fell slightly after OPEC + agreed to increase production from August.

The barrel price is determined by testing a key support level.

The coalition agreed to increase oil production by 400,000 barrels per day, starting from August until the end of this year.

The agreement itself will be extended until the end of 2022, and after April next year,
production shares will be increased for a number of Coalition member states,
including the UAE, which initially disrupted the meeting, demanding an individual quota for itself,
and the new quota in 2022 will be 3.5 million barrels per day instead of 3.18 million barrels currently.

The market does not appear to be surprised by this announcement,
the barrel price has lost only 0.70% since the opening of Asian transactions tonight after losing 4% last week.

According to experts, for the oil market, this agreement is ill-defined.

This is due to concerns about inadequate world demand. Oil prices continue to fall.

According to analysts, today we are again waiting for a Brent price of $72-73 per barrel.

The Japanese Stock Exchange is declining ahead of the Olympics

The Tokyo Stock Exchange ended sharply lower on Monday and continues to suffer from renewed pandemic spread in Asia, including Japan,
and new concerns about the strength of the global economic recovery.

The Nikai index fell 1.25 percent to 27652.74 points and the broader Topix index lost 1.3 percent to 1907.13 points.

The New York Stock Exchange in the Red Zone ended Friday with profits following the deterioration of the U.S. consumer confidence index,
largely due to rising inflation in the United States.

A total of 1,410 new cases of coronavirus were recorded on Saturday in Tokyo,
a new record since January for the Japanese capital, as the Olympics open on Friday.

Despite the numerous constraints imposed on all participants, several athletes have already tested positive for COVID-19,
including at the Olympic Village for the first time on Sunday.

Investors in Japan also avoided the risk on Monday due to the week’s shortening on the Tokyo Stock Exchange,
which will be closed on Thursday and Friday for two consecutive public holidays coinciding with the opening of the Olympics.

One expert, Shinichi Yamamoto, said in an interview with AFP: “While this is nothing new,
rising infections in Asia and Japan are dampening investor morale.”

In China, the Hong Kong Stock Exchange’s Hang Seng index fell by 1.65% at about 6:50 GMT,
while the Shanghai and Shenzhen composite index finished close to balance.

A negative start for European stocks

The first session of the week saw a sharp decline in European stock exchanges, following Asian markets,
with worried investors concerned about the trend in the number of
COVID-19 infections and the restrictive measures that could be reintroduced. 

On the other hand, in Great Britain, today began the so-called “Freedom Day”, that is, a return to normal life,
despite the high number of infections, about 50,000 cases. 

While doubt remains about the movements of central banks and especially the Federal Reserve,
bearing in mind the fact that inflation is rising significantly and that the reassurances from conservatives,
Jerome Powell in the lead, are not enough to restore calm. 

In recent days, the United States Secretary of the Treasury, Janet Yellen, has also expressed concern,
although she said she was convinced that “in the medium term, we will see inflation return to normal levels.”

Thus, European indices are all in the Red Zone, starting with FTSE MIB-1.89% in Milan,
followed by CAC 40-1.41% in Paris, DAX 30-1.27% in Frankfurt,
Ftse 100 in London, the IBEX 35-1.50 % in Madrid and AEX -1.37% in Amsterdam.

 

A negative start for Asian and European markets

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