The price of a barrel of Brent crude temporarily traded at just over $80, close to the perceived ‘pain threshold’ of the OPEC+ production cartel: At this price level, the cartel had decided in the past to cut production in order to stabilise the market, Commerzbank’s commodity analyst Barbara Lambrecht notes.
Oil supply remains tight
“On the first of August, the Joint Ministerial Monitoring Committee of OPEC+ will meet which is to review every two months whether the cartel's current production strategy is still appropriate. This would provide an opportunity to prepare for adjustments. However, Reuters reported last week that informed sources believe this is unlikely.”
“The fact that the market is currently undersupplied also speaks against a change in production policy. US crude oil inventories have fallen for the fourth week in a row. In addition, the survey-based OPEC production estimates due in the coming week should confirm that supply remains tight, at least from this side.”
“However, if prices continue to fall because demand concerns become a sustained negative factor, the major producers Saudi Arabia and Russia could well agree in the short term and cancel the gradual withdrawal of voluntary cuts planned from October onwards.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD plunges to near 0.6400 as weak Aussie GDP boosts RBA dovish bets
Disappointing data results from key fundamentals in Australia weighed heavily on the Aussie Dollar, sending AUD/USD to fresh four-month lows in the boundaries of the key contention zone at 0.6400.
EUR/USD holds near 1.0500 ahead of Powell speech
EUR/USD managed to clinch its second day in a row of gains, extending the recent breakout of the 1.0500 mark in response to the inconclusive tone in the US Dollar ahead of key US data releases later in the week.
Gold advances to $2,650 area as US yields edge lower
Following a consolidation phase near $2,640, Gold gains traction and rises to the $2,650 area. The benchmark 10-year US Treasury bond yield pushes lower after weak macroeconomic data releases from the US, helping XAU/USD stretch higher.
Crypto Today: Ethereum price crosses $3.7K as Tron and Avalanche lead DeFi Market rally
Ethereum price crossed the $3,700 mark as it outperformed Bitcoin on Wednesday amid positive tailwinds from news reports that the Securities & Exchange Commission (SEC) could approve staking for crypto ETFs in the US.
Four out of G10
In most cases, the G10 central bank stories for December are starting to converge on a single outcome. Here is the state of play: Fed: My interpretation of Waller’s speech this week is that his prior probability for a December cut was around 75% before the data.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.