Crude Oil Prices Capped By US Shale Oil Output
By Daisy Joseph
Despite the efforts taken by the OPEC to curb oil production all around the world, the US Shale oil production hasn’t helped the oil prices to climb higher. Recently, the crude oil prices recovered slightly, as the prices reached a three-day high. However, the US Shale oil production output is expected to be 4.58 million barrels per day, in the upcoming July month. The predictions by the EIA has resulted in a sudden decline in the oil prices.
The oil market has been confident that the OPEC production cut deals, would help the oil prices. However, the continuous increase in the US oil production has nullified the efforts of all the OPEC members. The traders will concentrate more on the API data and OPEC monthly report to understand the supply-demand balance required in the market.
The upcoming FOMC rate decision weighs heavily on gold prices as well. The yellow metal is unable to climb the price ladder because the traders are wary of the directional bias. With USD gaining strength in the forex market, investors show less enthusiasm about the non-interest bearing assets. Unless there is a major political uncertainty that could rattle the market, gold prices will continue to suffer.
Jeff Sessions, US Attorney General is expected to testify and his comments could result in turmoil. As a risk aversion strategy, investors may show some interest in the gold metal, when the USD weakens in the market. Gold continues to close at 1260.85, on an average on a daily basis.
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