USD gains momentum again, Oil leaps and GBP declines

Oil prices open with a price gap after OPEC+ decision

By Raed Alkhedr | @raedalkhedr | 3 April 2023

Midday Market update
  • Brent crude rose 5.34% near $84 pb

  • The USD starts week on a positive note

  • OPEC + decides to cut production by 1.16 million barrels per day

Oil begins week with a price gap

OPEC+ decided to cut production voluntarily before today's meeting, by 1.6 million barrels per day with Saudi Arabia accounting for the biggest cut by 500,000 bpd.

Additionally, the United Arab Emirates, Kuwait, Bahrain, Oman, Iraq, and Algeria also announced that they will voluntarily reduce oil production during the same period. The Saudi Arabian Ministry of Energy announced on Sunday that the voluntary reduction will be added to the agreed-upon production cut at the October meeting.

Oil prices saw sharp increases at the beginning of the week, with West Texas Intermediate crude rising by over 5% to be traded close to $79 per barrel, while Brent crude rose by about 5.34% to be traded at $84 per barrel.

Despite positive data, the GBP falls against USD

Economic data released on Friday showed that the British economy avoided recession and turned to growth, with GDP growing by 0.1% in the last quarter of 2022, while forecasts indicated that the economy would remain stable at 0.0%.

On the trading front, the GBP/USD pair began the week with a decline of about 0.30%, trading near $1.2311.

Amid market anticipation of US labor market data, the dollar is rising.

After a wave of volatility and uncertainty that dominated the markets in recent times, the US dollar index has seen a significant rise against most major currencies since the end of last week.

The US dollar index began the week with a slight increase, trading near 102.72 points. The markets are closely watching important economic data this week, with the most prominent being US labor market data, which is due to be released at the end of this week.

Personal consumption expenditure data in the United States, which is the Fed's preferred measure of inflation performance, slowed down last month, recording 0.3%, while the previous reading for the index was 0.5%. On an annual basis, the index slowed to 5%, down from the previous reading of 5.3%, while the index in its basic form recorded 4.6%, down from 4.7%.