Crude prices traded lower after the Pentagon committed more troops to the Middle East and as OPEC and allies slowly make progress on scheduling their next meeting to discuss production cuts. The decision by the US to send more troops could be a sign that the US may try to assure safe travels by oil tankers in the region following multiple attacks over the past several weeks. Further evidence was also released adding to the US speculation that Iran was behind the attacks of this week’s attacks in the Gulf of Oman.
OPEC and friends have had a lot of difficulty on when to reschedule the 176th OPEC meeting, which was expected on June 25th. It appears that Iran is offering meeting between July 10th and 12th, possible progress we could see an agreement on a date being reached since Iran is no longer insisting on keeping the original date. The decision needs to be unanimous by OPEC and we should find out shortly if the rest of the cartel agrees.
Even if we see OPEC and allies agree on extending production cuts, global demand will need a boost for oil prices to rise higher. Trade progress at the G20 summit in Japan is mandatory for the demand side argument for stronger crude prices.
Oil remains in bear market territory and key support remains the $50 a barrel level for WTI.