Saudis, Iraqis Keeping Crude Oil Prices Relatively HighCrude oil prices gained at London’s trading session on Monday morning. The bullish trigger was attributed to the fact that Iraq a leading OPEC member disclosed it would reduce its crude oil production to support global demand for crude oil.
Brent Crude still remains below the $45 resistance level with an upward move being capped by concerns about the pace of the post-COVID-19 economic recovery.
However, Crude oil bulls are ramping up their long bets because the Saudis (OPEC’s largest producer of crude oil), for the second time in three years, are curbing the amount of crude it sends to the world’s largest economy in an attempt to stabilize crude oil prices and hasten the rebalancing of supply and demand in the present fragile energy market.
Still, crude oil traders remain relatively bullish in the short term, on OPEC unwavering compliance commitment, reaffirmed when the Saudis and Iraqi energy ministers made a joint statement, stating that they are fully committed in complying with OPEC+ present agreement.
Crude oil traders in the mid-term will be focused on August 15 trade talks, which surround primarily on China’s energy imports. Any signs of conflicts in the lead up to this discussion could make a strong case for crude oil bears, pushing Brent crude price around the $40 support level or lower.
Outside the rising tensions between US-China, which is expected to be a norm between now and November the primary concern for crude oil traders still remains the rising COVID-19 caseloads ,the main macro affecting energy demand.