#ForexChief #opec #OilBenchmark #forexnews #sanctions #embargoes #Cartel #worldnews #Brent⠀
💵 OPEC does not like the price: speculators leave the market
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🛢️ Panic over a recession in the US and China caused oil benchmark prices to drop below $100. Such a price is categorically unprofitable for large players. Situation is aggravated by the flow of incorrect information about the destruction of demand, political conflicts, and the consequences of price
embargoes and sanctions.
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Recall that despite the pressure from consumers, at the last summit, OPEC and its allies decided to increase production by 100,000 b/d again. Progress in nuclear talks with Tehran could bring up to 1 million b/d of Iranian oil to the market, adding competition to a volatile market. The actual announcement of the deal will be accompanied by a noticeable sell-off in the Brent contracts.
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Saudi Energy Minister Prince Abdulaziz bin Salman said that «if the market does not become adequate», OPEC+ will be forced to cut production. Most of the Alliance members are already operating at capacity limits, so the actual increase in production in September is likely to be only 30-35% of the planned volume.
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However, speculative open interest in oil futures fell three weeks ago to a minimum since February 2012 and continues to decline. This means that real buyers and sellers are leaving the market. Both real participants and speculators do not like the verbal interventions from OPEC and the illogical decisions of the Cartel to reduce production. The reduction in real volumes makes the market too volatile: this is a defensive reaction to the tightening of monetary conditions.
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The stock of speed in the market is weak, and the reaction to the statement of the representative of Saudi Arabia is not enough to break through the key resistance zones − prices added only $6-8. For strong growth, more significant factors are needed, so the risk of short-term buy transactions remains high.
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Profits to y’all!