In view of analysts at ANZ, once again, OPEC finds itself at an important juncture as the outlook for supply remains challenging.
“A slowdown in growth comes as the risk of further disruption in the Middle East rises. However, the market remains concerned about the impact of the trade war on demand. This makes next week’s OPEC+ critical to sentiment, and thus oil prices, in the short term.”
“OPEC production is likely to continue to decline in the short term. Aside from the current production agreement, losses at sanction-hit countries such as Iran and Venezuela are building. But rising tensions in the Middle East have thrown a spanner in the works. While attacks on oil tankers in the Strait of Hormuz haven’t disrupted supply, the risk of it developing into a wider conflict is rising quickly.”
“OPEC’s meeting comes only two days after President Trump and Xi are scheduled to sit down at the G20 summit to discuss trade. The outcome of that meeting could determine how OPEC proceeds.”