A surprise production cut by Saudi Arabia and several of its OPEC+ partners could complicate the outlook for stocks, bonds and currencies while undercutting the fight against inflation by the Federal Reserve and other central banks, analysts said.
At first brush, the cut appears timed to coincide with the pre-summer increase in oil refinery production as producers and refiners prepare for the busy summer travel season in North America, said Jorge Leon, senior vice president of oil markets research at Rystad Energy, in a note to clients. WTI crude for May delivery CL00, +0.01% CLK23, +0.01% was up 6% in recent trade at $80.24 a barrel on the New York Mercantile Exchange. June Brent crude BRN00, -0.18% BRNM23, -0.18%, the global benchmark, gained 6.1% to $84.78 a barrel on ICE Futures Europe.
Read: Energy ETFs jump after OPEC+’s unexpected oil-production cut, soaring past S&P 500 in Monday trade Rystad’s Leon said the cuts could add another $10 to global oil prices, which could exacerbate headline inflation around the world. The jump in oil prices might make the Federal Reserve’s inflation-fighting job “a little more difficult,” but it is too soon to know for sure, St. Louis Fed President James Bullard said in a Bloomberg Television interview.
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Source: Reuters - 🏆 2. / 97 Read more »