Today OPEC+’s summit continues for the second consecutive day, but already there are signs of dissent among the ranks of the world’s biggest oil exporting cartel.
It appears that the United Arab Emirates and Russia (who is not a formal OPEC member but has been adhering to the organization’s policies voluntarily) both want to benefit from the current oil price levels, which are the highest for 2020, and are opposed to any more production cuts.
However, experts have argued that the subdued demand for oil brought about by the coronavirus pandemic will remain a problem even after vaccines become available and that the oil market will need to be under careful scrutiny for another year or two because it had been plagued by oversupply issues for years.
OPEC’s leader Saudi Arabia, meanwhile, has consistently pushed for a more patient approach by recommending short-term delays to output increases. This time around it also asked for an extension of the current agreement to keep output levels lower for another three months.
The meeting was supposed to end today but due to the disagreements it has been extended until Thursday.
Speaking of conflict, today the Federal Reserve’s chief Jerome Powell and Treasury Secretary Steve Mnuchin will both be testifying before Congress about the state of the US economy. They got in a row recently when Mnuchin refused to extend some of the Fed’s stimulus programs.
Powell has remained firm in his stance that the American economy needs continued support throughout the coronavirus crisis and has also stated that the government needs to help with its own stimulus too. Even Donald Trump supported the plans for more fiscal stimulus, but it seems both his administration and the Republican Party refused to comply.
Meanwhile, the rally on the stock market continues, thanks to optimism about the availability of Covid-19 vaccines in the near future. Both Moderna and Pfizer are working on getting their drugs approved in the US and the EU, the two most affected regions at the moment.
Bitcoin is also continuing to perform well, having recovered from last week’s downward correction, and currently sits close to $20,000 again. If the risk appetite among investors remains strong, the cryptocurrency can continue to grow.
The US dollar, on the other hand, is still weakening since there is little demand for safe havens at the moment. It’s currently trading at a two-and-a-half-year minimum against all major currencies.
