Brent Oil hit the seven-month high settling above $50/barrel after the drawdown in US crude stockpiles offset the impact of OPEC’s failure to set a new output target. Brent closed at its highest level since last November and WTI crude for July rose 0.3% to $49.17, also recovering from an earlier drop. Saudi Arabia re-considered the idea of a ceiling on production ahead of the meeting, however, without the agreement from Iran and non-OPEC members, the overall results were unchanged and the Kingdom is still expecting to squeeze competitors to maintain its market share. Shortly after the meeting in Vienna, the US Energy Information Administration reported a decline of 1.4 million barrels in US crude inventory during the last week, supporting crude features make up most of their post-OPEC losses. The report also indicate that US oil production continues to fall, favoring further price recovery.
The US job market is expected to remain solid with the bullish ADP National Employment Report released last night. This pre-NFP payroll report shows that the private payrolls across the US raised by 173k last month versus a forecast of 170k from Moody’s analytics. This report increases market’s expectation for a stronger official non-farm payroll report from Bureau of Labor Statistics due today. Nevertheless, the ADP report does not count the 35.1k Verizon workers who were on strike, whereas NFP figures are expected to factor them tempering market expectations.
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