- Oil Production Cut Discord
- OPEC Meeting
- Surging Copper Demand
Copper (HG/USD) rose to three- month highs on an uptick in demand for the red metal, with the opening of world economies’. Oil prices were also poised to finish the week higher after rallying in the early Friday session.
Oil Price Uncertainty
Brent crude futures were up by more than 0.5% in early Friday session to highs of $40.19 a barrel. U.S West Texas Intermediate crude futures were also up by 0.2% to highs of $37.49.
A spike in oil prices came amidst growing discord among oil producers about the way forward on production cuts. While Russia and Saudi Arabia have agreed to maintain production cuts at 9.7 million barrels a day through July, some members are yet to agree to the same.
The Organization of the Petroleum Exporting countries OPEC and allies are set to meet via video conferencing on Saturday to iron out production cut issues. The likes of Russia and Saudi Arabia are hoping Iraq and others will agree to commit to production cuts highly needed to push oil prices above the $40 a barrel level.
Failure of OPEC and allies agreeing to the 9.7 million barrel day cut could in a rollover of cuts back to the 7.7 million BPD, something that could rattle the oil markets.
Copper Price Outlook
On the other hand, copper prices continued to edge higher as the global economy continued to recover from the COVID-19 pandemic. The opening up of the global economy has seen an uptick in factory activity, especially in China, conversely triggering strong demand for the industrial metal known for its wide array of uses.
Prices for the red metal known for power and construction have risen by over 20% after touching one-year lows in March. Benchmark copper in the London Metal Exchange has already reached highs of $5,552 after tanking to lows of $4,600 an ounce in March.