The commodities market has been going through a major problem this year with most of them seeing major declines. The crude oil and wheat market have been an exception as the WTI crude and Brent have gained by 11.9% and 10% respectively. Wheat futures have gained by more than 27% as traders become worried about the supply. As the year goes on, traders should focus on a few events that will likely lead to more movements in the crude oil sector.
OPEC and Non-OPEC Joint Ministerial Monitoring Committee (JMMC)
The OPEC and the JMMC will hold a teleconference meeting on 20th August. This will be a meeting to review the progress made by the OPEC and non-OPEC members on regulating the supply of the commodity. Their previous meeting was held on July 18. During that meeting, the OPEC producers announced that their compliance to production cuts had declined to 121%. They attributed this to the increased oil outputs and the issues surrounding Iran. Iran has already pressed the case for more production from Saudi Arabia and Russia and the country has threatened to shut down a major gulf oil export channel. Traders should watch out for this meeting and trade on the news that will come out.
US Winter Blend Gasoline
The United States is a major oil producer and major consumer. Therefore, the happenings in the country are very important. On September 15th, gasoline outlets in the country will start selling winter-blend gasoline. As such, refineries usually start preparing for this in August and some go for maintenance to configure the plants. The benefit for the winter blend gasoline is that it is cheaper to produce and it contains more butane and less blended elements. After the switch happens, consumers tend to see a small drop in crude oil prices.
In addition to this, the hurricane season will come during the quarter. In 2017, the hurricane season saw the closure of the biggest refineries in the United States which are located in Texas, Florida, and the Gulf of Mexico. Depending on how the hurricane season is, the price of crude will be affected.
Sanctions on Iran
Last week, sanctions on Iran kicked off. The sanctions announced last week will affect the supply of dollars by the Iranian central bank, the trade of gold, automobiles, and other commodities like rags. These are tough sanctions but the toughest ones will start on November 15th. This is when the United States will place the tariffs on crude oil. In short, all companies doing business in Iranian oil will be barred from the United States market. This will affect most companies because of the role of the US banking system.
Every December, OPEC members holds a meeting in Vienna to discuss the issues arising in the world market. It is during this meeting that the cartel makes decisions on whether to increase or reduce the supply of crude oil. It is also at this meeting that the major decisions are made. In the 2015 meeting, the members announced that they would reduce the supply which led to a rally on crude oil.
The post Key Crude Oil Related Events to Pay Close Attention to appeared first on Forex.Info.