What does the OPEC meeting mean for oil?
XM Group | Jun 30, 2021 11:16AM ET
Careful approach
The world's largest oil cartel has played its cards very carefully this year. It is raising production extremely slowly even though demand has recovered nicely, a combination that has catapulted oil prices to their highest level in three years.
This week, the group is expected to announce another production increase of around 500k barrels per day, starting from August. That may sound like a lot, but it would still leave the oil market in a massive supply deficit according to OPEC's own calculations. This means demand would continue to exceed supply.
On the upside, the bulls need to overcome the recent high of 74.45, before turning towards 75.25. But the real test will be the 76.90 region. This was both the peak in 2018 and the low in 2012, so it has been a real fortress in the past.
Beyond oil itself, the outcome of this meeting could also impact the currencies of major oil-producing nations, like Canada and Russia.
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