The meeting of the OPEC+ Joint Ministerial Monitoring Committee started at 5:30 pm BST. The meeting might lead to the decision about the cartel’s collective production cuts - a move that was implemented amid Covid-19 pandemic. Without any new decision, the scale pf production cuts from July would be slightly above 5 million b/d.
Currently there are 2 scenarios being considered:
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OPEC+ might increase its production by 500k b/d in August, further decision every month
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Production boosted by 400k b/d each month until the end of 2021
Interestingly, the second scenario was welcomed by investors as the first scenario could be associated with higher supply growth. Currently the deficit on the oil market stands at 1 million b/d.
On the other hand, some producers do not see the point in increasing production. They say that the pandemic is not over, which is why the demand is set to be suppressed. Such view is presented by Kazakhstan and Iraq. However, Russia and Saudi Arabia wish the output increases.
Due to the fact that the meeting started really late (5:30 pm BST) and the importance of the measures is so significant, the decision might be released very late. It could even be postponed for tomorrow or the weekend.
OIL.WTI is very close to local highs from 2018 near $77 per barrel. Smashing above it would push oil prices to highest levels since the sell-off from 2014. Source: xStation5
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