The United States and Iran keep arguing over the resumption of the nuclear agreement. Besides, investors are paying attention to the outcome of the OPEC+ meeting this week. The meeting delayed the surge in Iranian oil exports. Therefore, oil prices fell after hitting the October 2018 high on Monday.
ICE Brent crude oil performed strongly at the close last week and successfully closed above US$76/barrel. Today, the Asian morning market continues to be firm. This week’s attention will be on OPEC+, which will meet on Thursday to discuss production policy. The meeting will mainly discuss how to deal with the August supply.
Given the strong market and concerns about tight supply, OPEC+ should increase supply. The organization should reach an agreement on an increase of 500Mbbls/d in August.
Anything below this amount might be enough to see the bulls push the market higher in the short term. Between now and Thursday, there will be much noise around the group’s decisions.
The OPEC+ Joint Technical Committee Meeting Will Be Held on Tuesday
The meeting will be followed by the Joint Ministerial Monitoring Committee meeting on Wednesday.
Despite the recent market strength, speculative positions remained almost unchanged in the last reporting week.
Last Tuesday, net long positions of funds under management decreased by 2,534 lots to 309,732 lots.
Similar to NYMEX WTI, net longs of funds under direction decreased by 2,752 lots to 421,757 lots within a week.
The natural gas market is still well supported. The price of TTF hubs in Europe is higher than 32 Euros/MWh, reaching the highest level since 2008.
A more robust Asian LNG market also means that Europe needs to compete more actively with Asia for LNG cargoes.
The United States added 13 oil and natural gas rigs in June. With the increase in oil prices, this is the 11th consecutive month of growth. Though, this is the smallest monthly increase since September 2020.