Market players marched into the 2017 trading year adopting a risk-on attitude, amid growing optimism over Donald Trump pushing ahead with a large fiscal spending package. The “trump effect” not only elevated global stocks to 19-month highs in January, but also sent the U.S. dollar to its highest level in 14 years.
Oil prices surged this quarter as Brent crude put in the best performance in 13 years. This comes as oil demand is surging, geopolitical risk is rising and Moody’s warns that shale oil producers will need $50 a barrel plus oil to make any money.
Market participants in crude oil are continuing to shrug off persistent jawboning from oil ministers of some OPEC countries, most notably Saudi Arabia, about extending the production cuts into the second half of 2017, and possibly the first quarter of 2018.