The oil market awaits OPEC’s decision+
The G20 summit was positive and quite expected in terms of meeting Donald trump Putin and XI Jinping. A trade deal between the US and China did not take place, but negotiations will continue. And though a specific timetable for the deal has not been announced, some positive results will be present on world markets.
The meeting of the leaders of the US and China remember a modest victory for China and positive for risk assets in the short term. Oil quotations have grown on 4% – OPEC countries, including Russia, will continue cutting production until the end of the year. The news was expected, but announced it a little earlier.
The question remains, what term will be to reduce production. Probably agree for the remaining 6 months. Despite the tough restrictive sanctions, Iran will also support the reduction. The US and China resumed talks on the resolution of trade conflict, so the threat of a global economic slowdown are now on the backburner.
In this context, the oil market received two additional drivers of growth: reduction in OPEC production and the reduction of tensions between the US and China.
The major parties have carried out the balance of power in the commodity futures market. Final investment decisions will be taken after the meeting of OPEC in Vienna. The oil market has played the expected scenario by 70%. Now it remains to sum up the results of the OPEC meeting, decide on the period of production cuts.
Given the positive impact factors, the price of oil will continue to rise. Until the end of July we can fix the price in $of 69.00 per barrel. Shale and WTI will rise to $62,00.
“International financial center”