There was little excitement in the oil markets during Tuesday’s trading session; with investors on guard as OPEC and Non-OPEC members discussed compliance levels on their output cut agreement, in Abu Dhabi.
After an eventful last week, the start of this one has been very quiet so far. Monday saw minimal volatility across the majors as the dollar extended its NFP-related rebound against the commodity currencies but declined slightly versus the euro. The single currency rose despite data showing German industrial production unexpectedly fell 1.1% in June.
The oil drama continues as Repsol and Statoil move to pull oil workers from Venezuela as the country becomes less stable and may be on a path toward civil war. Saudi Arabia’s Saudi Aramco said it is cutting supply to its customers by at least 520,000 barrels per day in September raising expectations that OPEC will get its compliance issues under control and start to rein in Libya and Nigerian production.
The British pound/U.S. dollar currency pair suffered a double whammy on the last two days of last week, resulting in a 245-pip drop from the week’s high to the low. First, it was the Bank of England on Thursday, which came across as less hawkish than expected as only two members voted for a rate rise, followed by a surprisingly strong U.S. jobs report on Friday.