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OPEC+ leans toward extending oil production cuts for 2-3 months. Crude oil prices are down modestly today

Hope to keep market tight as prices start to recover

OPEC and its Russia-led partners are leaning toward extending oil production cuts for another two to three months, the WSJ reports.
An officials familiar with the discussions says the hope is the cuts will keep markets tight even as prices start to recover from Covid-19-inspired lows earlier this year.
The group will meet next week (Monday/Tuesday) to discuss the issue. The recent rise in crude oil prices gives some countries more reason to oppose continued production cuts.
In April, the OPEC 13 members and 10 Russian led producers, agree to carry out record production cuts of 9.7 million barrels a day.  Those cuts would be phased out as the recovery developed from Covid.

Israel likely behind the assassination of Iranian scientist

 Mohsen Fakhrizadeh reportedly assassinated

Iran’s Foreign Minister Zarif is on the wires saying:
  • Israel likely behind assassination of Iranian scientist Mohsen Fakhrizadeh
  • there are serious indications of Israeli role and killing of Iranian nuclear scientist
  • urges international community, especially EU To and their shameful double standards and condemn this act of state terror
Meanwhile the Pentagon declines comment on a killing of Iranian nuclear scientist when asked by Reuters.

Gold still searching for answers as we look towards the end of the week

Gold consolidates after the drop earlier this week just above $1,800

Gold D1 27-11

The recent doses of vaccine optimism has tempered with the mood in gold and eventually that led to a break below key support around $1,850 at the start of the week.
The drop saw a push towards $1,800 and the 200-day moving average (blue line) and since then, the selling momentum has paused and price action has largely consolidated around $1,800 to $1,818 over the past few sessions.
Amid the Thanksgiving holiday period, we may not get much answers when it comes to gold ahead of the weekend. Buyers are staving off a further decline for now but the mood is fragile and we’ll only get a better sense of things next week.
There hasn’t been any real headline push to really offer buyers or sellers anything to work with and that is resulting in some slight consolidation at the key level above.
While vaccine optimism may present further downside risks for gold, the counter-argument is that easy monetary policy that will stay in place for several more years is to provide a supportive factor for the yellow metal in the big picture.
That is leading to a lot of push and pull and a test of buyers’ resolve as price leans on $1,800 and the 200-day moving average.
A break below the latter would be the first since the brief dip in March, which was due to the “buy dollar, sell everything” panic. Beyond that, the last time gold traded below both its key daily moving averages was all the way back in 2018.
That said, a further pullback towards the range of $1,700-50 will likely invite another round of dip buying. Looking further out, gold may find it tough to replicate the monstrous rally from below $1,500 to $2,000 again. But that doesn’t mean it is headed for a nosedive.
Late December to January seasonality has always been supportive of gold and if the market isn’t too heavily focused on any vaccine talk at the time, there’s still a good argument for gold to climb especially after a healthy correction.

Eurozone November final consumer confidence -17.6 vs -17.6 prelim

November final consumer confidence -17.6 vs -17.6 prelim

  • Latest data released by Eurostat – 27 November 2020
  • Economic confidence 87.6 vs 86.0 expected
  • Prior 90.9; revised to 91.1
  • Industrial confidence -10.1 vs -10.9 expected
  • Prior -9.6; revised to -9.2
  • Services confidence -17.3 vs -16.3 expected
  • Prior -11.8; revised to -12.1

Euro area economic confidence slumped on the month amid tighter restrictions across the region and that highlights the struggle with the recovery towards the year-end.

As the restrictions look set to continue until the closing stages of the year, it makes for a very uncertain outlook going into Q1 2021 if the virus situation isn’t contained.

Saudi, Russia energy ministers to hold informal talks with OPEC+ JMMC tomorrow – report

TASS reports on the matter

In saying that the informal OPEC+ consultations will be held tomorrow on 28 November.
This is usually done to get a feel of the mood music in the room and also to try and feel out what the two big heads i.e. Saudi and Russia are going to want ahead of the ministerial meetings next week on 30 November and 1 December.

 

The market is largely expecting an extension of the output cuts by three months but tensions surrounding the deal itself and the future of the bloc (UAE is reported to want to quit) is making for some nervousness as we look towards the week ahead.

Nikkei 225 closes higher by 0.40% at 26,644.71

A solid end to the week for Japanese stocks

Nikkei 27-11
Asian equities are keeping more mixed on the session as investors are left to their own devices amid the Thanksgiving holiday in the US. The Nikkei is still the standout performer as it continues the stellar November run so far.
Elsewhere, the Hang Seng is flat and the Shanghai Composite is up 0.3%.
S&P 500 futures were lower initially but are keeping closer to flat levels now, though I’d be mindful of looking too much into this amid thinner liquidity conditions today.
Again, just be mindful that US markets will observe a half-day of trading later.

Germany sees total confirmed coronavirus cases surpass the 1 million mark

RKI reports another 22,806 new cases today, bringing the total confirmed number of coronavirus cases across the country to 1,006,394

Germany
For some context, Germany only saw total confirmed cases touch 500,000 at the end of October so the next 500,000 to reach the 1,000,000 mark came in the last 27 days. There are currently nearly 300,000 reported active cases across the country.
Adding to that, there were 426 deaths reported in the last 24 hours and that makes this the deadliest day of the pandemic. Total deaths now stand at 15,586 persons.
In terms of healthcare capacity, there were 3,826 (+45) coronavirus patients requiring intensive care as of yesterday with 5,575 (20%) intensive care beds still available.
Compared to two weeks ago, that figure was 3,186 coronavirus patients requiring intensive care with 6,587 (23%) intensive care beds still available across the country.
In case you missed it, German chancellor Merkel and state premiers did agree on extending ‘lockdown light’ to 20 December but also agreed on a few new restrictions as well:
Germany