OPEC won’t be able to keep oil prices down

By 08/07/2021News

Gold  1797,86

EURUSD   1,1796

DJIA  34486,50

OIL.WTI  72,085

DAX   15699

It looks like some of our oil forecasts are starting to come true, although WTI crude was still making new highs a few trading sessions ago. Everyone was looking forward to the OPEC+ meeting, which was supposed to develop a production strategy for the next six months, but again it did not work out.



The main event of the week was the failure of the OPEC+ negotiations. Once again, the group cannot agree on quotas. It is unclear what will happen next. While the June agreement is still in force, production levels could now easily be breached due to disagreements within OPEC+.
Saudi Arabia has started to act and has raised prices on almost all raw materials. Biden urges OPEC to finally reach an agreement because he wants lower gasoline prices, which affect all commodity prices. High commodity prices are unacceptable to the Fed. They hamper economic development and affect inflation.
Iran and the Kingdom of Saudi Arabia have declared normalisation of relations. The US is negotiating closely on Middle Eastern affairs and the situation is likely to stabilise and sanctions on Iran may be lifted. This too is bound to have an impact on the oil price.
Perhaps the new strain of coronavirus, which is starting to spread around the world, will play a role. If the epidemic increases, of course the new lockdowns will cause demand for oil to fall and black gold itself should go down in price.
Summing up, it is worth saying that in the current situation, it is very difficult to judge in which direction the price will go. A lot of factors are still pointing in the up direction, but there are also almost all conditions for a fall, given that new exporters may enter the market and many in the OPEC+ group are likely to break the current agreement.

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