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Commodities Corner: OPEC may stick to production cut agreement

Updated : May 31, 2018 10:41:05 IST

After six days of decline, there was some buying seen in crude overnight.

Both Brent and the West Texas Intermediate crude  saw gains of more than 2 percent each on worries that the Organisation of Petroleum Exporting Countries (OPEC) and other producers will pump more crude to boost supplies.

OPEC have lost a lot of market share to other producers especially US, and increasing supplies and bringing down prices is definitely not on their agenda.

The US is now budgeting $50-55 per barrel of a crude oil prices, anything above that is a profit for them. The break-even that the US is looking at right now is anywhere between $45-55 per barrel, so the crude oil prices at $75 per barrel does mean that most of the US shale producers are making immense profits right now.

Markets would also watch out for the US weekly inventory data.

Some strength was seen coming back in metals as trade tensions in US and China are still on but there are easing concerns over Italy political risk and US dollar has also come off a bit which has led to some buying in metals.
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