Without OPEC + intervention, it is hard to imagine oil prices rebound as strongly as recently, since last year’s negative bottom in trading history.
|The refinery of the Aramco National Petroleum Corporation, Saudi Arabia. Photo: AFP|
That intervention shows the strength of the OPEC + coalition to take control of oil prices. OPEC +, rather the meeting of this alliance, once again become the focus of attention. All eyes are on Saudi Arabia and Russia – the two biggest players in the position of controlling oil supplies.
Brent and crude oil continued to be under selling pressure for the past three days, but oil prices somewhat recovered yesterday on March 3. Brent is trading at $ 62.89 / barrel, up 21% year-to-date, while crude oil is up nearly 23% year-over-year.
Among the factors that brought the world oil price down to a negative bottom of 37.63 USD / barrel on the historic trading day of 20/4/2020 in the US, Covid-19 and the vaccination situation is still the leading factor.
Oil investors believe the Covid-19-resistant vaccine will put an end to the current disaster and bring the world home. near the normal economic activities. Their optimism has somewhat stimulated demand for oil, pushing oil prices up compared to earlier this year.
The OPEC + alliance plans to meet online on the afternoon of May 4 (London time). After the meeting ends, a press conference to announce the oil supply decision will take place. Oil traders predict that OPEC + will increase supply to the market, because they believe that the serious adverse effects of the Covid-19 pandemic on oil supply and demand have started to diminish.
Therefore, it is time for the oil powers to “discharge” more goods to the market. Most oil traders said that Saudi Arabia, a “player” leading the oil supply, will not cut unilateral supply anymore and it is likely that the country will maintain oil supplies to the market. in moderation.
OPEC + members have the same opinion about increasing supply to the market, because they all want it. But what they will argue at the meeting is whether or not to bring the 1.5 million bpd supply back to the market.
This meeting set out two main goals, including: to consider the possibility of returning to production level of 500,000 barrels / day in April; and determine the supply of Saudi Arabia after the country cut production by 1 million barrels / day.
According to OPEC +, the oversupply situation due to the slowdown of global economic activities in recent years will completely end in next August.
Oil prices are “predicted” to be very sensitive in the next 24 hours or after. Even more, oil prices will shake more dramatically if there is disagreement between policy makers of OPEC +. Saudi Arabia is often hesitant to decide to increase supplies, while Russia has a headache when it comes to oil valves.
Oil traders whispered about the possibility of higher supply and some OPEC + members will leave the meeting and express disagreement. If these rumors become a reality, it is also a very normal thing for OPEC +. Regardless of the progress of the meeting, oil speculators still take advantage of the “face” of OPEC + members as an opportunity to trade for profit.
Mr. Naeem Aslam, a stock and commodities broker with experience in emerging and emerging markets, predicts on Forbes that oil supplies will rise again. If OPEC + unifies to return to 500,000 bpd output, there will not be much volatility in the oil market, but if it approves to increase supply by one million bpd or more, oil will suffer a wave of selling violently.