Oil prices are responding positively to an extension of the current OPEC/Non-OPEC production deal, especially because Nigeria and Libya agreed to cap production, but a monthly report by the Energy Information Administration (EIA) on U.S. production rising over 3% to 9.48 million barrels a day seemed to put a bit of a wet blanket on the markets' enthusiasm. Not to mention a million barrels of hedged shale oil output.
OPEC and Non-OPEC sources announced that they have agreed to extend production cut until the end of 2018, but will review the situation in June to make sure that the cuts are not causing larger problems for the Cartel.
The central banks’ inability to achieve their inflation targets led some analysts to argue for modifying these targets. Are they inappropriate in a modern, globalized economy? Should central banks change them? Or should they conduct a more rule-based policy, as John Taylor argues? How would such moves affect the gold market?
U.S. equity markets are expected to open slightly higher on Tuesday following a flat and rather slow start to the week. A rare piece of good news for the UK this morning as the Bank of England announced that all banks passed its stress tests for the first time since the financial crisis.