Shortly before the next OPEC+ meeting, there were rumors that the cartel would increase oil production. However, the group of oil producers decided the opposite.
Earlier, OPEC+ agreed to temporarily reduce oil production volumes. At the last meeting, the cartel was supposed to discuss deepening output cuts. Otherwise, it could easily return to the previous production volumes. The deal was not extended. At the same time, Russia announced that it would continue fulfilling its oil output cut obligations until the end of December 2024. That is, the country decided to extend its voluntary oil production cut of 500,000 barrels per day.
In addition, Saudi Arabia, which also pledged its own 500,000 barrel-a-day supply reduction under the previous agreement, said it would not boost production. Moreover, Riyadh will make a unilateral reduction in crude oil volume production, slashing another 1 million barrels per day in July. This measure will be extended if necessary, Saudi officials added. Against this background, oil instantly gained value. The asset is likely to continue its bullish run, approaching at least the level of $80 per barrel.
According to the chart, Brent crude oil kicked off the new trading week with a gap up, driven by the news released on the weekend. As a result, the quote temporarily jumped above the 78 mark but then pulled back. To extend gains and reach new price levels, the quote needs to consolidate above $79 per barrel. Otherwise, it may go down, filling the gap.
Despite the decision of Russia and Saudi Arabia to slash oil output, the ruble remained almost stable. Moreover, the quote even rose just above 81 rubles per dollar. This is mainly because other OPEC members can safely increase production volumes. In other words, the two largest oil-producing nations in the world agreed to a voluntary reduction in revenue. This measure is temporary as other countries are not able to offset the volumes that Riyadh and Moscow can produce. The market will gradually realize the fact of tighter supplies, which in turn will lead to higher oil prices. It is already happening. So far, it is not enough to compensate for a shortfall in revenue. Therefore, the Russian currency is likely to trade in the range of 81 to 82 rubles per dollar in the short term.
Now let’s move on to gold. Friday’s quite strong data on the US labor market led to a steep rally in the dollar. Given the inverse correlation between the dollar and gold, the latter immediately returned to the area of $1,940 per ounce. Moreover, there is a likelihood that the greenback will gain more ground today. In this case, the precious metal may fall below that level, at least for a while.
That's all for now. We continue to follow developments in the financial markets. Subscribe to our channel and follow the news with us. See you soon!

00:00 Introduction
00:14 The situation in the oil market
00:53 Saudi Arabia to Cut Oil Production
01:37 Brent
02:06 USD/RUB
03:46 Gold
03:44 Conclusion

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