Rumors about an unexpected increase in oil production at the upcoming OPEC+ meeting led to a steep drop in oil prices.
Today and tomorrow, the market is expected to react sharply to any rumors concerning the outcome of the oil producer group's meeting. This could result in wild price swings. Moreover, Russia earlier announced its intention to leave its oil production quotas unchanged. If the country reiterates its plan or Saudi Arabia confirms it, oil prices will immediately go up.
Expectations of increased oil output can be attributed to growing demand from China and India, whose economies are gaining momentum. Although today’s statistics on another drop in China’s manufacturing activity have sparked some concerns over a recovery in demand from the largest oil importer.
Yesterday, Brent crude dipped by over 4%, notching one of the most significant price changes since early May. Such a sharp drop brought the quote below the 74 mark, indicating a continued downtrend. If the quote fixes below this level, the benchmark will most likely head toward the level of 70.
After briefly falling below $1,940 per ounce, gold entered a bullish correction, rising to $1,960 per ounce. There have been no sharp price changes on the chart so far, and the metal is still in a correction. However, things may change if the current pullback turns into the first stage of its recovery.
It's all about the US debt ceiling. Earlier, Joseph Biden assured that lawmakers would vote on the bill on May 30. However, yesterday, it was just reviewed by the committee. Today, an up-or-down vote will be held by the House of Representatives. The Senate will then take up consideration of the bill and announce its decision only on June 2. Notably, Janet Yellen said that the government would likely have enough money until June 1. Then the projected debt ceiling deadline was extended to June 5.
Moreover, some representatives of the Republican Party have already announced that they will oppose the compromise deal. So the risks of uncertainty persist. Moreover, they are on the rise. In such a situation, demand for safe-haven assets, primarily gold, tends to grow. If today’s vote passes without any delays, gold will most likely return to the area of $1,940 per ounce.

00:00 Introduction
00:11 Oil prices. OPEC+ meeting
00:39 Grounds for expectation of higher oil production
01:00 Brent
01:24 Gold
01:49 U.S. government debt decision and its impact on gold price
02:31 Gambling over the US debt ruling as a risk of uncertainty
03:03 USD/RUB
04:53 Conclusion

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