Dubai recovers from 11-day losing streak, Saudi to boost oil production

July 2, 2018 11:28 am


There seems to be a slight improvement in global risk sentiment on indications that US President Donald Trump may be slowing down the negative rhetoric on China trade.

Signs of de-escalating trade tensions between the United States and China could stimulate risk appetite to a degree and reduce the flight to safety. This scenario may perhaps encourage more investor sentiment towards local markets like the Dubai Financial Markets as a knock-on effect.

READ: Expert opinion: Oil looking oversold heading into latest OPEC meeting

Gold up from six-month lows on bargain hunting, weaker dollar

June was a cruel trading month for Gold thanks to a broadly stronger US Dollar.

Although uncertainty and anxiety over global trade developments was a dominant market theme, investors simply avoiding safe-haven Gold. The driving force behind the yellow metal’s weakness continues to be based around a broadly stronger Dollar. With the Greenback supported by expectations of higher US interest rates this year, zero-yielding Gold is poised for further punishment. Market players may exploit the current technical rebound to push prices lower.

In regards to the technical picture, Gold remains bearish on the daily and weekly charts. Sustained weakness below $1250 could encourage a decline towards $1241.

READ: UAE, Saudi to file countersuit against Qatar, as feud reaches boiling point

Saudi Arabia to boost the increase of oil production

Oil bulls could face headwinds down the road after Donald Trump tweeted that Saudi Arabia could boost output by “maybe up to 2,000,000 barrels”.

Although the US administration swiftly backed off Trump’s tweet, the prospects of higher supply in the markets are likely to weigh on oil. Reports of Kuwait raising output by 85,000 barrels per day could add to the downside pressure. It must be kept in mind that US Shale production has reached a record 3 million barrels a day. The threat of soaring production in U.S shale fields and rising output from OPEC and Russia rekindling oversupply concerns may weigh heavily on oil prices.

READ: OPEC may not have a handle on oil prices: Supply leaks spring everywhere

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AMEinfo Staff
By AMEinfo Staff
AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.



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