Saudi Arabia Commits to More Oil Cuts


Weekly inventory numbers will be released later on Tuesday by the American Petroleum Institute. The U.S. Energy Information Administration will be releasing its numbers on Wednesday.

Oil futures edged higherOil futures edged higher on Tuesday afternoon in Asia after Saudi Arabia made an unexpected announcement that it would deepen production cuts in June by an additional 1 million barrels per day to help end the supply glut caused by decreased demand and a temporary increase in production in the past few months. When implemented next month, Saudi Arabia will be cutting its total production to 7.5 million barrels per day, some 40 percent lower than its April production levels. Kuwait and the United Arab Emirates also agreed to cut their production by another 180,000 barrels per day in total.

U.S. WTI futures were up 0.91 percent as of 1:33 p.m. HK/SIN, to $24.36 per barrel. Brent crude futures were up 0.34 percent to $29.73 per barrel after touching above $30 per barrel earlier in the session. Gains were capped by concerns that second waves of the coronavirus pandemic were beginning in some areas and that the devastation caused by the COVID-19 virus still hasn’t been fully priced in. Many analysts believe that the demand for oil should be increasing as global economies gradually reopen, but then they question why additional cuts were necessary if demand is set to rise.

Weekly inventory numbers will be released later on Tuesday by the American Petroleum Institute. The U.S. Energy Information Administration will be releasing its numbers on Wednesday.

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Currency Movements

On the currency markets, the dollar weakened against its primary trading partners as confusion and concern remained about the spread of the coronavirus both within the U.S. and around the world. The greenback retreated from two-week highs high on Monday when the dollar index hit 100.440 .DXY. The index was trading down 0.06 percent on Tuesday afternoon to 100.17 .DXY. The greenback eased against the yen, down 0.251 percent to 107.39. It also eased against the euro, with the common currency up 0.05 percent to $1.081.

The Australian dollar touched above its 100-day moving average on Monday before backtracking on Tuesday. It was down 0.139 percent against the dollar to $0.648. The decline came following reports that China would stop importing some meat imports from Australia. The report was published in The Australian newspaper, though it was attributed to unnamed sources and could not be confirmed.



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