Oil: Investors to remain in wait-and-see mode ahead of June OPEC meeting - ANZ
Analysts at ANZ offer their outlook on oil prices heading towards the OPEC meeting held later this month on June 21st - 22nd.
Key Quotes:
“Oil production losses in Venezuela, Angola and recent Iranian sanctions have tightened the market more than intended by OPEC.
Saudi Arabia and Russia are considering raising output by 1mb/d. However, we expect an increase of 600kb/d. Such an increase could be absorbed by the market without altering the fundamentals.
We see that depleted inventories and geopolitical risks are keeping prices well supported.
OPEC meeting 21-22 June: decision to either raise output or continue with production cut.
US shale production: US output has been rising strongly, offsetting the bullish OPEC supply curbs.
Demand growth indicator: global economic growth momentum can potentially affect oil demand growth, with a slowdown to 1mb/d in consumption a negative for prices.
OPEC's proposed production increase sets the scene for investors to liquidate the record speculative positions they had built up over the past few months.
This could weigh on prices in the short term. That said, the upcoming OPEC meeting on 22 June will be worth watching, with investors unlikely to hold any aggressive positions ahead of the event.”
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
