FXStreet (Edinburgh) – Strategist Andrew Kelvin at TD Securities does not see major announcements in the OPEC meeting due on June 5th.
Key Quotes
“The OPEC meeting on Friday marks the first official meeting after the group broke with tradition and decided to not support the crude oil price environment by cutting production in November last year”.
“At current prices, there is little incentive for the group to cut quota, confirming global oversupply will endure”.
“We have a strong conviction (around 85%) that they leave the quota unchanged, and while that is generally the same conviction as in the market, should result in a modest bearish move as some longs get liquidated”.
“Any cut to quota would see a very bullish move in the market, while there also may be some focus on comments from Saudi Oil Minister al-Naimi or new Saudi Aramco Chairman al-Falihif they provide any forward price guidance, which we think they may try to anchor to around $70 bbl for year-end”.
“Overall, we look to sell any modest bounces in August-delivery Brent at $64 bbl with target at $59.50 bbl, stop at $65 bbl”.
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