Round one of the U.S. presidential debate is over and as expected big punches were exchanged from both sides, but clearly no knockout blows were landed. Although polls were showing different outcomes of who won the debate, financial markets obviously declared Clinton as the winner.
Talks between Saudi Arabia and Iran had not gone well as the Iranians seemed intent on raising output to 5 million barrels a day and the Saudis wanted to have independent verification of oil output to make sure there was no cheating.
Worries about Europe's banks wrenched stocks into reverse on Tuesday and halted a surge in Mexico's peso that followed Democrat Hillary Clinton's victory over Republican Donald Trump in the first U.S. presidential debate.
Crude oil settled up 3% on Monday as the world's largest producers gathered in Algeria to discuss ways to support prices, with nervous trade driving volatility to its highest since a similar meeting to freeze output in April in Doha which failed.
Crude oil prices on both sides of the Atlantic have plunged by 4% on Friday due to the scepticism that the world’s largest oil producers can reach a deal – when they meet on Wednesday – to end the supply glut that dragged prices by more than 60% since mid-2014.
As Russian energy minister Alexander Novak flies to Algeria this week for talks with OPEC on output cuts, developments at home indicate non-OPEC Russia is still ill prepared for any coordinated production action. Five leading Russian oil companies, responsible for three quarters of output in the world's largest producer, all say they will be boosting output next year after reaching record levels in recent months.
Saudi Arabia offering to cut production in a sign of good faith after they lowered expectations for a deal in Algiers this week. Saudi Arabia says they are ready for any outcome and there is talk that if OPEC can come to an agreement, they could still formalize this meeting. OPEC negotiations are heating up as the cartel members look to solidify a deal to restrain oil output.
The British pound/U.S. dollar currency pair gained 0.683 percent in the last 5 days. The single currency is trading at 1.1231 after the Fed decided to keep rates unchanged at its latest monetary policy meeting on Wednesday, Sept. 21. The market had already priced in a cautious Fed, but Chair Yellen's speech at the Jackson Hole central bank summit in late August raised the possibility of an interest rate hike.