OPEC production cuts exceed agreement
OPEC compliance to the 2016 OPEC and non-OPEC production agreement presently stands at 106% due to excessive cuts by Saudi Arabia. Now if non-OPEC Russia and OPEC-member states like Iran, Nigeria, Libya and UAE meet their agreed quotas in the next 30 to 60 days, I suspect the Oil price will surely rise at least +10% from present levels. What the equity market has been saying in the past few days is that investors are now locked and loaded. A short-term bull cycle has begun.
I wish I could say the same about the precious metal group; however, some strength in the US trade-weighted Dollar this week has served to weaken this group. The continued strength in the Euro and Yen over the next two months are key to a further weakening of the USD and renewed strength in precious metals. The BREXIT story has popped up again, however. Hope and facts for the Goldminers however are divergent at this point. As I see it, prices are being knocked down to attract more buyers. Doing the same in the Oil & Gas market took over three months. I expect a few days will do it for the Goldminers though as the rest of the Miners are having a bullish week.
