OPEC and its oil-producing allies cancelled their planned April meeting on Monday, a move which confirmed that the production cuts that began in January will continue until at least June. According to Khalid al-Falih, the Saudi Arabian energy minister, the decision was made because OPEC expects the oil market to remain oversupplied at least through the first half of 2019. The delay will enable members to evaluate the market with a bigger picture and to see how the sanctions on Venezuela and Iran will impact global supply.
The decision whether to extend the production cuts or to halt them will likely come at the Join Ministerial Monitoring Committee meeting on June 25th. The production cuts implemented in January boosted oil prices significantly since the start of the year. The cuts removed 1.2 million barrels per day from the production, but some producers are still producing above their set quotas, which leaves room for further cuts if necessary. Extending the cuts, however, could cause tension between Russia and OPEC
Brent crude futures were up 0.12 percent as of 6:29 a.m. HK/SIN, to trade at $67.62 per barrel. U.S. WTI futures were down 0.08 percent, trading at $59.04 per barrel.
In Australia, consumer confidence was up by 2.2 percent after it plummeted 4.6 percent last week, a report from ANZ showed on Tuesday. Further data out of Australia today showed that in the March Reserve Bank Board meeting, the Board emphasized its uncertainty about the country’s slowdown in output data, even as the labor market remains supported. The Board noted that “they assessed that it would be appropriate to hold the crash rate steady while new information became available that could help resolve the current tensions in the domestic economic data.” The Australian dollar was trading mostly flat following this news, up a modest 0.03 percent in the early afternoon, to $0.7104. The U.S. dollar also eased against most of its other trading partners, falling 0.14 percent against the yen to 111.26. The euro and the British pound were both up 0.06 percent against the greenback.