Oil Prices Slide Despite New Production Cuts

oilOil futures were broadly lower on Monday, pressured by data that showed a decline in Chinese exports for the fourth consecutive month. Analysts had expected an increase in Chinese exports by 1 percent. U.S. WTI futures plummeted 1.11 percent to $58.54 per barrel as of 12:20 p.m. GMT, while Brent crude futures were down 1.06 percent to $63.71 per barrel. The downturn came despite OPEC’s commitment late last week to cut production by an additional 500,000 barrels per day at least through March 2020.  At the end of 2018 OPEC announced a product cut of 1.2 million barrels per day in 2019. They announced on Friday that the new round of cuts will bring the number down by an additional 500,000 barrels per day, setting the production cuts at 1.7 million barrels per day. According to reports by CNBC, the cut was deeper than expected. The announcement of the cuts after OPEC’s meeting last week sent WTI prices up nearly 7 percent for the week, and Brent crude futures up nearly 3 percent.

Pressuring oil prices in recent sessions was an expectation for lower-than-normal demand during this holiday season, due in part to the trade war between the United States and China, and in part due to the starting signs of an economic slowdown that are surfacing in various global economies. On the flip side, gold prices were higher on Monday afternoon, with futures of the precious metal up 0.23 percent to $1,268.50 per barrel as traders showed favoritism to the safe-haven asset in light of the lingering global economic uncertainty.

The U.S. dollar continued its struggles on Monday afternoon in Europe, sliding against the Japanese yen after holding its own during the Asian session. The greenback was down 0.11 percent against the yen to 108.47. The British pound was up 0.21 percent against the dollar, trading at $1.216, and the euro surged from modest gains in the Asian trading session to a 0.13 percent gain just after noon in London, to trade at $1.1072. the dollar index was down 0.11 percent to 97.59 .DXY.

Sari Holtz

Sari Holtz began working at DailyForex in 2011 when she was hired to provide daily news analysis and to manage the daily content. Since then, she has continued to provide regular news items that focus on how political events impact the global economy. She also works directly with dozens of Forex brokers worldwide to ensure that they get their messages across and that traders can find the best broker for their individual needs.