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Oil Prices Rally in Asian Trade Amidst OPEC+ Production Cut Speculations and Economic Report Anticipation

Oil prices surged in Asian trade on Tuesday amidst reports hinting at an extension or potential deepening of the ongoing production cuts by OPEC+ during their upcoming meeting later in the week. This news, coupled with the anticipation of significant economic reports scheduled for the week, kept traders on the sidelines, curbing substantial market gains.

Reuters detailed the intentions of the Organization of Petroleum Exporting Countries and its allies (OPEC+) to collectively reduce output during the meeting scheduled for Thursday. Concerns about sluggish demand had caused oil prices to struggle, hovering below the $80-per-barrel mark once again. The delay in the meeting, shifted from Nov. 26 to Nov. 30, had also impacted oil prices, fueled by reports citing disagreements among member states regarding output reductions.

By 20:39 ET (01:39 GMT), Brent oil futures climbed by 0.3% to $80.20 a barrel, while West Texas Intermediate crude futures saw a 0.5% increase to $75.20 a barrel. These contracts were recovering from five consecutive weeks of losses.

Attention remains fixed on OPEC+ production cuts. Over the past year, Saudi Arabia and Russia led the reduction in production within OPEC+, responding to concerns about dwindling global demand that drove prices down. Saudi Arabia, the de-facto leader, attributed the decline to speculators influencing oil markets. Speculations suggest both countries might extend or deepen the ongoing supply cuts into early 2024, a move analysts believe will tighten markets and bolster prices. Saudi Arabia has strived to maintain Brent oil within the $80 to $90 per barrel range.

However, challenges persist in maintaining this range, attributed to record-high U.S. production, escalating Chinese stockpiles, and increased output from select OPEC states. These factors led to speculations that oil markets might not be as constrained as initially anticipated.

Additionally, weak economic indicators from major oil-importing nations, particularly China, have fueled concerns about slowing demand.

Apart from the OPEC+ meeting, markets are eagerly anticipating key economic reports this week. Notably, Euro zone inflation data is due Thursday, alongside a crucial reading on U.S. PCE prices, the preferred inflation gauge for the Federal Reserve.

Of particular interest to oil markets are the impending purchasing managers index (PMI) readings from China, which are expected to offer insights into business activity in the world’s largest oil importer. The November readings gain significance following a series of weak figures in October.

The U.S. PMIs for November are also slated for release this week, expected to reveal further declines in business activity. Additionally, a revised reading on the third-quarter GDP is on the horizon.

Dow futures tick higher, November’s strong performance winds down

US stock futures were trading within a tight range during Monday’s evening deals following a negative performance from major benchmarks.

By 6:30 pm ET (11:30 pm GMT) Dow Jones Futures and S&P 500 Futures ticked 0.1% higher while Nasdaq 100 Futures remained flat.

Ahead in Tuesday’s trade, Traders are eagerly awaiting economic data on housing prices and consumer confidence.

In terms of earnings, cybersecurity firm CrowdStrike Holdings Inc (NASDAQ:CRWD) is set to report after the closing bell.

Investors will also be closely following a series of speeches by Federal Reserve officials, including Chicago Fed President Austan Goolsbee and Fed Governors Christopher Waller and Michelle Bowman.

During Monday’s regular session, both the Dow and S&P 500 closed approximately 0.2% lower, while the NASDAQ Composite saw a slight decrease of nearly 0.1%.

Investors focused on stocks related to online shopping. “Buy now, pay later” stock Affirm Holdings Inc (NASDAQ:AFRM) soared nearly 12%, Shopify Inc (NYSE:SHOP) increased close to 5%, and Inc (NASDAQ:AMZN) lifted 0.7%.

On the bond markets, United States 10-Year rates were at 4.391%.


Small but Mighty: Midcap and Smallcap Stocks Defy Expectations, Outpace Giants in November Surge

Despite forecasts favoring blue-chip stocks, their smaller counterparts continue to flex their market muscles, showcasing unwavering strength against more established players.

In November, the Nifty Midcap 100 Index soared by 8.2%, its most impressive leap since July 2022. Simultaneously, the Nifty Smallcap 100 Index marked an impressive gain of 9.2%, its most substantial rise since February 2021. These performances left the Sensex and Nifty 50 trailing behind with increases of 3.3% and 3.8%, respectively.

Shrey Jain, the brain behind SAS Online, credits this November surge to unexpectedly strong earnings, foreseeing a streak of formidable gains ahead. Analysts also point to the drop in crude oil prices and the ease in US bond yields as crucial factors fueling the broader market’s bounce-back.

Smart investing is like a finely crafted masterpiece, where the strokes of knowledge, the colors of research, and the brushstrokes of prudence all come together. It’s a dance of numbers, where you tango with risk, salsa with opportunity, and waltz with foresight. It’s like having a crystal ball, only instead of predicting the future, you create it through astute decisions. So, be the investor who trades in wit and wisdom, and watch your portfolio boogie to the rhythm of growth and success. After all, in the grand ballroom of investments, being smart is always the trendiest move!