Sheikhs give hope for an increase in oil supply

Saudi Arabia and the United Arab Emirates are ready to immediately increase oil production, the Financial Times reported. After this publication, the futures contracts on WTI oil today they went down by more than 2%, to a level below USD 113 per barrel.

There was speculation earlier in the week that members OPEC + they are considering suspending Russia's participation in the production agreement. Other information important for the oil market has also been released. One was that the European Union decided to significantly limit the purchases of gas from Russia as part of the sanctions imposed on that country for an armed attack on Ukraine. The second was related to the re-opening of China after another wave of pandemic constraints and a potential increase in oil demand.

All in all, it could have fueled the price of the raw material. Indeed, on Wednesday, WTI oil futures rose by more than 1,5% to over USD 116,5 a barrel, posting the sixth consecutive month of gains. Today's price drops interrupt the wave of growth, and the initiative of the Gulf states, which could increase the supply of raw materials on the market and lead to further reductions, would be announced at today's meeting of the OPEC + cartel members.

Falls on the US stock markets

The futures contracts related to the three main stock indices fell today by around 0,3 percent, and on Wednesday the Dow Jones lost 0,54 percent, and the S&P 500 and Nasdaq Composite by 0,75 percent, respectively. and 0,72 percent. The biggest losses were suffered by companies from the following sectors: consumer protection, healthcare and finance.

The downward move has begun after Jamie Dimon's rather harsh comments, the president of JPMorgan. He warned of an economic hurricane that would come as a result of the war with Ukraine unleashed by Russia and actions Federal Reserve. The US central bank raises interest rates to keep inflation under control.

Investors also analyzed new data from the US economy. They indicated a still strong labor market as well as stronger than expected manufacturing activity. It seems that the likelihood of further interest rate hikes in the US grows in line with this. Christopher Waller, a member of the Federal Reserve Board of Governors, has openly said that he does not intend to postpone a 50bp rate hike until he sees inflation approaching the central bank's 2% target.