The Latest News - OPEC Looks To Curb Oil Production
Hello McFinancers! Big news for the commodities market these past few days.
The latest in financial news: OPEC+ looks to curb their production to increase oil prices, Uniswap postpones vote on fee switch for token holders, silver has a dramatic price decrease, and President Biden vetos SAB121.
OPEC+ Looking To Raise Oil Price
OPEC+ has recently reached an agreement to prolong all production restrictions into the upcoming year, a move likely to maintain oil prices at elevated levels leading up to the U.S. presidential election. This agreement encompasses the United Arab Emirates securing an enhancement to its official production quota, with major producers committing to voluntary cuts through 2025. These measures aim to bolster prices and prevent a global surplus, especially given the increasing output from non-OPEC players like the U.S. The extension of production curbs is expected to prevent a sharp decline in gas prices in the U.S. Additionally, this agreement coincides with Saudi Arabia's significant offering of shares in its national oil company Aramco, a move intended to finance the kingdom's economic transformation. The rationale behind the production curbs agreed upon by OPEC+ is clear: to support oil prices and avert a global surplus. This objective gains significance amidst the backdrop of escalating output from non-OPEC nations, notably the U.S., and concerns regarding demand amid prevailing high interest rates and inflation. These measures are designed to maintain an equilibrium between oil supply and demand in the market.
The recent adjustments in oil flows by OPEC may seem contrary to capitalist principles. For decades, OPEC has actively managed oil output from member countries to influence oil prices, exemplified by the oil embargo on the U.S. in the 1970s, which resulted in severe oil shortages and price hikes. OPEC's significant influence on global oil production and pricing over the years underscores its enduring impact on the world stage.
Silver’s Price Tumbles
The recent downturn in silver prices is examined, with the metal experiencing a significant drop of over 3% and falling below the important $30 mark. Notably, precious metals like silver and gold have been primed for a notable pullback after their strong performance in the preceding months. A daily chart showcasing silver prices is provided, emphasizing the breach of the critical $30 support level. Additionally, June's historical trend as the weakest month for silver over the past twenty years is underscored as it affects the price of silver within the first few days of June.
In light of historical trends, where June has consistently demonstrated a downward trajectory for silver prices, investors shouldn't be startled by the current price drop. This presents an opportune moment for investors to reassess their approach to commodity investments. Are they positioned for long-term, short-term gains, as hedges, or pursuing alternative strategies? We maintain our recommendation for investors to consider regular purchases of gold and silver as a hedge against a depreciating dollar, given the enduring value of these precious metals.
Uniswap Fee Switch
The Uniswap Foundation made an announcement on Friday regarding the postponement of a proposed upgrade vote. This vote aimed to enable rewards for UNI holders who staked and delegated their tokens. Sometime last week, an individual provided a reason for the Uniswap Foundation to review the proposed update for potential issues with the smart contract. The stakeholder potentially involved could be a bug bounty hunter who discovered a critical issue with the proposed upgrade. Consequently, the UNI swap token experienced a decline of approximately 9% following the announcement.
Uniswap, a pioneer in decentralized exchanges, remains a significant player in Ethereum's decentralized exchange ecosystem across various Layer 2 solutions. Recently, it introduced a mechanism allowing UNI token holders to receive a share of the fees generated from exchanges. While this concept may be novel to the crypto community, it mirrors the familiar practice of dividends in the stock market. Should the Uniswap community greenlight this fee structure, it could mark the inception of companies exploring avenues to distribute a portion of their revenue to token holders, akin to traditional stock market investors.
President Veto Against SAB 121
President Biden decided to veto a resolution aimed at overturning the SEC's Staff Accounting Bulletin (SAB) No. 121. This bulletin mandates institutions holding crypto assets to record them as liabilities on their balance sheets. The veto has sparked criticism from the cryptocurrency industry, notably from the Blockchain Association and Ripple CEO Brad Garlinghouse. They expressed disappointment that the administration disregarded bipartisan majorities in Congress who recognized the adverse effects of SAB 121. They also note that the SEC's guidelines were slated to go into effect on April 11 but faced significant opposition from both the crypto community and lawmakers. The objective of the SEC's SAB 121 accounting rules was to address the contentious issue of accounting for crypto assets and ensuring transparency in financial reporting.
While there's potential for the Senate and House to reconsider and override the president’s veto, the current political landscape suggests a shift toward more favorable attitudes regarding crypto in both chambers. President Biden's longstanding stance against crypto isn't surprising, as he previously indicated he would veto such a bill if it reached his desk. As of now, there's no news regarding Congress's intention to revisit the issue and override the president’s veto.
Join Today!
Join our newsletter to get more investing insight:
More updates on the market with an analysis of what it means for investors to help you stay ahead.
How-To Guides to help walk you through trades, staking, or other investments.
Access to all published books by McFinance for FREE.
Weekly investing ideas.
* Investing can be unpredictable and volatile. Investors should always do proper due diligence to determine if assets are right for them. We are not licensed tax or financial professionals.
Comments
Post a Comment