NOK stays vigilant on OPEC – Danske Bank

Jakob Christensen, Chief Analyst at Danske Bank, assessed the potential outcome from today’s OPEC meeting and its impact on the Norwegian Krone.

Key Quotes

“The highlight in the calendar today is the OPEC meeting in Vienna. Since late September, OPEC has worked on a deal to limit or cut output to support oil prices”.

“There is no prescheduled time for an announcement but it is likely to come late in the afternoon (CET). Yesterday, oil prices dropped back on comments from Iran that it will not cut output followed by comments from Saudi Arabia that it will only cut output if Iran and Iraq join a deal”.

“OPEC deal or not, we do not think it will matter much for the oil market over the medium and long term. A deal may send the price on Brent crude temporarily towards the high end of the range of USD44-53/bbl it has traded in over the past months”.

“No deal will push it towards the low end. The correlation between NOK and oil has strengthened in the recent week, i.e. we expect the outcome of the OPEC meeting to also be reflected in EUR/NOK tomorrow”.