Markets are looking forward to the OPEC meeting.. A positive start for European markets in the second half of the year

Markets are looking forward to the OPEC meeting

Markets are looking forward to the OPEC meeting.. A positive start for European markets in the second half of the year

Markets are looking forward to the OPEC meeting.. A positive start for European markets in the second half of the year:

The second half of the year begins today, in anticipation of OPEC + ministerial meeting, which may set the price path during at least this and the next sessions. 

Evest follows developments in the commodity trading market in the following lines:

Oil stays in a calm situation so far.. waiting for the results of the OPEC meeting

U.S. West Texas Intermediate crude oil traded below $74 per barrel on Thursday morning,
while waiting for the OPEC + decisions that we will know after Thursday’s periodic meeting next week. 

The market is now focused on the right balance between supply and demand,
and it may appear that the market has already priced in a significant increase in production by the group.

The price of West Texas Intermediate crude listed on the U.S. NYMEX Stock Exchange fell 0.29% to $73.68 on Thursday morning.

In another quiet session, prices were close to $74 per barrel.

Meanwhile, Brent crude rose by a modest 0.13% to $74.74 on Thursday morning.

At a trading session on June 30, world oil prices rose after U.S. crude inventories fell for the sixth week in a row and a report by the Organization of Petroleum Exporting Countries (OPEC) predicted that the oil market would be undersupplied this year.

Brent North Sea crude for August delivery rose

At the conclusion of this session, the price of Brent North Sea crude for August delivery rose 37 U.S. cents, or 0.5%, to $75.13 a barrel, while Brent North Sea crude for September delivery rose 34 U.S. cents to $74.62 per barrel. In the meantime, U.S. light crude rose 49 cents, or 0.7%, to close at $73.47 per barrel.

Over the past six months, the price of West Texas Intermediate crude has risen by 51.4% – the last time we saw such a range of half-year increases in 2009.

The period from the beginning of April to the end of June was also the fifth quarter of growth in a row. Overall, this 15-month period had a very impressive increase of over 265%.

the American Petroleum Institute

Data released Wednesday evening by the Energy Information Administration confirmed preliminary estimates announced by the American Petroleum Institute the previous day.

United States crude oil inventories fell by 6.7 million barrels, again exceeding the expectations of analysts, who, on average, had expected a fall of 4.7 million barrels. This is the sixth bearish reading which in a row, could indicate a healthy economic situation in the oil industry and a recovery in demand.

In just one week, the OPEC + meeting will be held on Thursday, when the group’s member countries will discuss a plan to increase production from August. 

According to analysts, the Cartel may release up to 550 thousand barrels of oil per day as of next month, or up to 10% of current production cuts.

Goldman Sachs

However, even this figure may be insufficient to curb the further rise in raw material prices.

Goldman Sachs believes that only an increased supply by OPEC+ can curb the upward trend.

An internal OPEC report stated that the oil market is expected to be short-lived,
but there may be an oversupply once the group’s production reduction agreement expires.

OPEC Secretary-General Mohamed Barkindo recently said that oil demand is expected to grow by 6 million barrels per day in 2021,
while Goldman Sachs’s expectations exceed 2.2 million barrels per day, exceeding the supply of 5 million barrels per day.

On the other hand, a recent Reuters survey showed that the average price of Brent crude is expected to be $67.48 per barrel this year,
while the average of West Texas Intermediate crude is expected to be $64.54 per barrel.

Both prices are close to their recent highs in 2018. This is the seventh month in a row of price gains in the last eight months,
with gains of 10% for West Texas Intermediate crude and more than 8% for Brent oil.

A positive start for European markets at the beginning of the second half of the year

European markets are experiencing a promising start,  despite concerns about the prevalence of the delta-covid-19 variant.

Gains range from 0.43% in Brussels to 0.7% in Amsterdam.

While the Euro Stoxx 50 index rose by 0.76%.

Investors will have a lot to do on Thursday with the deployment of the Purchasing Managers’ Index and ISM manufacturing indicators on both sides of the Atlantic, and the OPEC Ministerial Meeting and its allies (OPEC +) or even the President’s inaugural address from the European Central Bank, Christine Lagarde, to the European Parliament’s Committee on Economic and Monetary Affairs.

Asian markets on the other side.. experiencing a negative start

Asian stock markets are mostly declining today, Thursday, as investors continue to worry about the course of the COVID-19 pandemic
and wait for closely watched monthly employment figures in the United States.

In Tokyo, the Nikkei lost 0.49%, while the Japanese capital recorded a significant number of new infections on Wednesday since the end of May.

Bloomberg reported experts as saying: “Even if the vaccination dissemination is progressing,
with a delta variant, the pandemic situation is still serious in Japan.”

However, the quarterly Tankan sentiment index, released on Thursday by the Bank of Japan,
showed a further improvement in the morale of large Japanese manufacturers, but slightly lower than expected.

Elsewhere in Asia, Hong Kong declined by 0.6% and Shanghai is barely equalized.

In China, the Caixin-Markit Manufacturing Managers Index fell more than expected in June to 51.3,
after 52 in May, while the Reuters consensus gave it to 51.8.

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