OPEC’s June 22 meeting promises to be highly consequential to oil markets.
At the last OPEC meeting in November, the group extended the production cut agreement until the end of 2018, but also added language at the insistence of the Russian minister to review the need for an updated agreement at the June meeting.
Now, the Russians are arguing for an increase in oil production. "Russians want to increase production,” Senior Energy Policy analyst Joe McMonigle said recently on The Macro Show. “The Saudis are playing ball but I think their plan is to convince them that any increase should be modest and mostly symbolic. After we get through that I think Oil prices rise."
McMonigle is sticking with that call today:
"The market should be disappointed by anything adding less than 1 million barrels of oil per day. But even if they do 1 million, demand is strong, and another 500,000 barrels per day from Venezuela (as a result of lackluster production) and close to 1 million barrels per day from Iran (due to the demise of the Iran Nuclear deal) will be coming off markets. All of this adds to bullish momentum."
Below are 10 tweets and a recent video outlining McMonigle's latest thinking on where oil prices are headed next.