The end of oil price declines? What will the week bring?

Oil prices rose sharply in reaction to the unexpected decision of OPEC+ countries to reduce production. During the morning trading, the price of a barrel of WTI oil tested around USD 80. Market participants are wondering if this is the end of the oil price decline, but the bigger question seems to be – what will the Fed do?

Mining reduction

Saudi Arabia and other OPEC+ producers announced on Sunday that they would cut output by just over a million barrels a day. Kazakhstan and Russia also joined the activities limiting the supply of the raw material. Monday's session started with a clear upward gap on the WTI oil chart, while the opening of European stock indices turned out to be mixed.

The reduction in crude oil supply – which has still not returned to pre-coronavirus levels – should push up the price of the raw material, at least in the short term, and this, in turn, may reduce demand. So what to expect from the Fed in the coming months?

Week under the sign of NFP

This week - and especially its second part - should be characterized by slightly lower investor activity. However, this does not mean that the market may lack volatility. On Friday - which in many Western countries will be a day off from work - we will get to know the latest Non-Farm Payrolls report, which may shed more light on the state of the American economy. We will also get hints on this subject in the coming days, when the PMI and ISM indices are released.

After two weeks of strong increases in the Fed's balance sheet triggered by the failure of Silicon Valley Bank, it finally began to decrease. However, market participants and the Reserve still do not agree on the level of interest rates in the coming years. Markets are expecting much faster rate cuts, the first of which could happen later this year.

We invite you to another meeting with the Chief Economist XTB dr Przemysław Kwiecień.

In today's video:

• The end of oil price declines?
• Will the Fed start cutting interest rates?
• What do macroeconomic indicators tell us?

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In addition, due to the very dynamic situation in the world, additional ones will be made available raports Video on the impact of war, pandemic and economic crisis on the global economy.

About the host

Dr Przemysław Kwiecień - Chief economist X-Trade Brokers. Doctor of Economics at the University of Warsaw, graduate of the University of Warsaw and London Metropolitan University (MSc). Holder of the prestigious CFA certificate. He has been working for XTB since 2007, previously he gained experience as an advisor to the Minister of Finance, Mirosław Gronicki, and an economist at Bank Millennium. At XTB, he manages the Analysis Department.

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