Oil Price Fundamental Daily Forecast – Major Players on Sidelines Ahead of Trump-Xi, OPEC Meetings

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging lower on Friday with most of the major players on the sidelines ahead of this weekend’s meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the G-20 summit in Osaka, Japan. To a lesser extent, traders are also anticipating the start of the OPEC meeting in Vienna on July 1-2.

At 09:27 GMT, August WTI crude oil is trading $59.16, down $0.27 or -0.47% and September Brent crude oil is at $65.34, down $0.33 or -0.47%.

U.S. – China Trade Relations

As far as the Trump-Xi meeting is concerned, traders are not looking for any major developments. It’s possible that both leaders agreed to the meeting just to gauge the temperature of each side. However, stranger things have happened before. In early December, for instance, both sides agreed to begin trade negotiations after holding a meeting at another G-20 summit.

Earlier in the week on Wednesday, Treasury Secretary Steven Mnuchin said that the U.S. was close to reaching a deal with China before negotiations fell apart in May, and expressed optimism about the potential for a deal in the future.

“We were about 90 percent of the way there and I think there’s a path to complete this,” Mnuchin said in an appearance on CNBC.

Trump also added that a trade deal with Chinese President Xi was possible this weekend but he is prepared to impose an additional $300 billion of U.S. tariffs on most remaining Chinese imports should the two economic powerhouses continue their trade spat.

OPEC Meeting

OPEC and its allies are widely expected to extend the program to cut production, trim the excess supply and stabilize prices until the end of the year.

The program has been working so far this year. On January 1, OPEC and other major producers including Russia began cutting 1.2 million barrels per day.

As far as this meeting is concerned, traders want to know if the cartel and its friends are considering deeper production cuts. This would be a bullish develop.

Other News

The tensions between the United States and Iran seem to have taken a backseat to the G-20 summit and the OPEC meeting. Tensions have eased a little since the U.S. announced last week-end it was prepared to negotiate.

Daily Forecast

We’re expecting more sideways action today as traders position themselves ahead of this weekend’s developments.