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What is OPEC?

The Organization of the Petroleum Exporting Countries (OPEC) is a collective organization of 13 oil-producing nations that aims to coordinate and unify their petroleum policies. Established in 1960, OPEC's member countries include Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates, and Venezuela.
 

What is OPEC+?

Since 2016 there has been cooperation between the Organization of the Petroleum Exporting Countries (OPEC) and other non-OPEC oil-producing countries. It includes countries like Russia, Mexico, Kazakhstan, and others. The aim of OPEC+ is to collectively manage oil production levels and stabilize global oil markets.
 

What Does It Do?

The primary goal for the group is to stabilize and control oil prices in the international market. The organization achieves this by managing oil production levels among its member countries. Through regular meetings, OPEC members discuss and agree upon collective production quotas, which dictate the amount of oil each country is allowed to produce. By collectively controlling production, OPEC aims to influence oil prices and maintain stability in the market.
 

How Does OPEC Meeting Impact Oil Prices?

OPEC meetings have a significant impact on oil prices. When OPEC members decide to decrease production quotas, the global oil supply decreases, leading to a potential increase in oil prices. Conversely, if OPEC members agree to increase production, it can lead to a surplus of oil, causing prices to decline. OPEC's decisions are closely watched by the global energy market as they can have substantial implications for the supply and demand dynamics of oil, thereby influencing prices and affecting economies worldwide. The announcements made during OPEC meetings often result in market reactions and fluctuations in oil prices.
 

Ahead of Tomorrow’s Meeting

Saudi Arabia announced yesterday that it will extend voluntary cuts of 1 million bpd for a further month in August. Russia shortly followed suit, announcing cuts of 500k bpd. These new cuts amount to around 1.5% of global supply and potentially pave the way for a new set of unified cuts this week which might help underpin oil prices.
 

Technical Views

Crude

Despite news of the cuts, oil prices remain muted today. Crude futures are in the green though still within last week’s range. More broadly, the 65.34 – 72.61 range remains key to watch with bulls needing to see a break of the range highs and bear trend line to encourage fresh upside momentum. 

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