The markets are witnessing an intensified dollar sale, affecting a wide range of assets, but not Crude Oil.
Oil grew throughout November but somewhat lost momentum at the end of the month. The events of early December bring back optimism in oil quotes, suggesting that the rally could develop in the coming weeks.
The rise in quotations at the end of last week has halted after signs of a disagreement among OPEC delegates concerning the fate of further quotas. Initial agreements implied an increase in quotas from early 2021.
However, the increase in virus cases raised concerns about the rate of recovery in demand, so the main objective by early November was to maintain current production quotas for another 34 months.
On the demand side, the situation was better than expected due to the recovery in production. Expectations of restrained supply and improved demand prospects in November led to a sharp increase in the price of more than 30. This rally seems to have caused several OPEC members to change their position on the deal.
Along with signs of a recovery in demand in Asia and Europe, the cartel saw a recovery in actual production and drilling activity in the US, i.e. future production. This brought back to the agenda the question of whether OPEC is shooting itself in the leg by allowing space for independent companies to build up production. As a result, independent companies are increasing their market share as prices rise.
Russia and Saudi Arabia seem to…