OPEC may be upstaged by the G-20 this weekend in terms of influence on oil prices

Catogory : Market Report

OPEC ministers meet Monday, but this weekend’s G-20 leaders summit could have much more impact on oil prices, depending on whether the outcome is good or bad for the global economy — and therefore oil demand. The world’s markets are focused on Saturday’s meeting between President Donald Trump and China’s President Xi Jinping to see if the two will agree to some type of trade truce and continue negotiations towards a broader deal. In the oil market, the trade wars have taken a toll on end demand in important markets like Europe and Asia, and that dynamic has helped hold down prices even as tensions between the U.S. and Iran flare up. “The meeting that really counts is the meeting at the G-20,”

“The question is why is demand growth weaker this year than previous years… we show demand this year growing at 1.1 million barrels a day. We see U.S. [production] growth up by 1.5 million barrels a day.”OPEC brings together a room of personalities and interests, and oil market pros are watching the dynamic of the relationship between Russia and OPEC, especially Saudi Arabia, and the strained relations between Iran and other OPEC members. Iran is suffering under U.S. sanctions and has threatened to begin enriching uranium at a higher level, which could hurt its agreement with countries that remain in the nuclear agreement the U.S. dropped out of last year. Iran has also been blamed for attacking Saudi oil assets, including two oil tankers. Last week, President Donald Trump aborted what could have been a retaliatory attack on Iran for shooting down a U.S. drone.