Commentary on oil influences from ANZ (this in summary):
signs of a tight market emerged ahead of the key OPEC meeting
- Negotiations over Iran’s nuclear program are facing renewed delays … . talks have broken down as both Iran and the US refuse to budge from their positions
- US shale producer ConocoPhillips also indicated the industry is unlikely to raise output significantly
- Producers remain disciplined with their spending and won’t overwhelm OPEC as it brings back more supply
- US crude oil inventories tumbled last week to their lowest level since March 2020
This should alleviate some concerns OPEC members may have in rising output.
However, renewed outbreaks of the Delta variant of COVID-19 are raising concerns that demand recovery may falter. Sideline discussions indicate that Russia is proposing to boost supply while Saudi Arabia wants a more cautious approach.
The median expectation is for OPEC+ to hike output by around 0.5m bbl/dat from August.
Earlier posts on the meeting: