In today’s meeting OPEC spoke about the slow growth on oil demand in this 2nd quarter.
“Throughout the first half of this year, ongoing global trade tensions have escalated,” resulting in “weaker growth in global oil demand,” the cartel’s Vienna-based secretariat said in its monthly report. “The observed slowdown in the global economy in the first half will be further challenged in the second half.”
On the 1st quarter the growth on demand raised of few less of 1 million barrels per day.
So what’s different now?
The trade war between U.S.A. and China lowered the demand building up supplies on the primary US stock hub.
Keeping the production at current levels will probably tighten global markets on the third quarter.
As Jeff Klearman declared: “Oil markets today reacted to what they saw, it’s a hot box and it’s becoming hotter”.
Just think that United Arab Emirates Energy Minister Suhail Al Mazrouei even indicated that OPEC may also need to constrain supply in 2020. The cartel pumps about 40% of the world’s oil.
OPEC new meeting is due in the next weeks, on the 25th of June, to discuss about new cuts on production, but Russia still hasn’t confirmed the partecipation.
Russian Energy Minister Alexander Novak was a fundamental pillar on the last meeting on December supporting the production cuts, what we can do at the moment is waiting for the OPEC meeting and G20 and be ready to start our trades.
If USA and China will find an agreement could represent a really strong upside trend on the market that could help global markets recover the passivity generated in the last weeks.
Crude oil dropped of -3.45% from last week touching the $51.14 per barrel.
New minimum fo the Brent as well this month at $59.97 (-3.05% from last week).