WTI crude oil futures fell more than 2 percent on Thursday to below $113 a barrel after news that Saudi Arabia is ready to increase oil production if Russian output drops significantly due to Western sanctions.
The Financial Times cited a diplomatic source who said talks were underway for Saudi Arabia and the United Arab Emirates to increase production immediately. This could be announced at today's OPEC+ meeting.
There was also speculation earlier in the week that some oil producers were considering suspending Russia's participation in the OPEC+ production agreement, further bolstering bearish sentiment. Thursday's drop in crude prices followed short-lived gains in oil markets, as initial reports of a partial ban on Russian oil imports from the EU and the reopening of the Shanghai market supported prices. Meanwhile, the EU failed on Wednesday to reach an agreement on the sixth package of sanctions against Russia after Hungary made new demands.
In the broad market, U.S. stock futures fell on Thursday after rather harsh comments from JPMorgan CEO Jamie Dimon, who warned of an economic hurricane triggered by the Federal Reserve and the war in Ukraine, which could cause Wall Street indexes to fall on the first day of trading in June. Futures tied to the three major indexes each fell about 0.3 percent. The Dow lost 0.54 percent on Wednesday, while the S&P 500 and Nasdaq Composite fell 0.75 percent and 0.72 percent, respectively. The consumer staples, health care and financial sectors led the declines. The declines seemed to follow Dimon's statements at an investment conference. Investors also looked at new data that showed a still-tight labor market and stronger-than-expected manufacturing activity, raising concerns about further interest rate hikes. Contributing to this may also be statements from the Fed's Christopher Waller, who said he does not intend to postpone a 50 basis point hike until he sees inflation moving closer to the central bank's 2 percent target.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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