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The oil price rallied this morning after Saudi Arabia announced it would cut oil production next month by half a million barrels a day.
This is seen as an indication that the Opec oil cartel could announce a concerted cut at its December meeting in an effort to support prices.
Saudi Arabian Energy Minister Halid Al Falih told reporters on Sunday in Abu Dhabi that:
"We as responsible producers will work and work hard to balance the market within a reasonable corridor,
Al-Falih argued that demand for Saudi oil is "reduced" due to seasonal factors, meaning that the world's largest oil producer will have to send less.
Al-Falih spoke at a joint meeting of the oil ministers of OPEC and OPEC and the markets rushed to get the hint:
Brent crude oil rose 2 percent this morning to $ 71.55 a barrel, while New York crude oil is 1.3 percent higher at $ 61 / barrel.
This follows weeks of steady decline – Brent crude oil was trading over $ 86 a barrel in early October, while fears of a slowdown in global growth have taken place.
Higher oil prices will help balance Saudi Arabia's budgets, while Riyadh remains under heavy diplomatic pressure following the assassination of Jamal Hasaggou.
But it will be a blow to consumers globally, promoting gasoline prices in the yard and the cost of transport in general.
Stephen Innes of the OANDA marketing company says oil is "the hottest issue" in today's markets.
Recent price fluctuations have a significant impact on all asset classes
He believes that the OPEC meeting will be decisive:
Oil prices in excess of $ 80 are never welcomed by OPEC customers and this seems to be a similar consensus among OPEC + and US producers.
However, producers worry that the latest selling frenzy could see Brent oil reaching $ 60 or lower. So it is in the best interest of OPEC to overcome the current supply throttle ….
But where oil prices are then directed, it ultimately depends on the producers.
It also comes today
The pound will be under pressure as Theresa May continues to struggle for a Brexit deal. Time – never a commodity
Italy will also be at the center, with new plant cost data from the morning. Rome is still under pressure from Brussels to revise its budget for 2019, and continues to claim it will not do so.
European stock markets are expected to grow by at least 0.5% on the open market.
- 9 am GMT: Italian industrial production for September