Upcoming OPEC meeting.. The Japanese stock market is in the red zone


Upcoming OPEC meeting.. The Japanese stock market is in the red zone

Upcoming OPEC meeting.. The Japanese stock market is in the red zone: Today marks a new meeting of OPEC +,
which is expected after recent negotiations failed to reach an agreement. 

Evest follows with you all the developments that are taking place in the commodity trading market and keeps you informed.

Oil prices are stalled pending today’s OPEC decision

Oil prices stalled in the short term as the UAE objected to the current OPEC + proposal, led by Russia and Saudi,
its allied neighbor, to increase their combined production by 400 thousand barrels per day from August.

The price of Brent oil barrels, which rose to $76.43 on Friday, ended the day at $76.17.

The Brent oil barrel traded at $76.22, up 0.07 percent from the closing of 09.25 today.

In the same minutes, West Texas Intermediate crude oil found buyers at $75.20 per barrel.

Markets focused on the meeting at which the Organization of Petroleum Exporting Countries (OPEC) and the OPEC Group,
made up of some non-OPEC oil-producing countries,
would discuss the decision on production policy to be implemented from August.

The decision meeting was postponed until today, as the group was unable to reach an agreement
at meetings held for two consecutive days on July 1-2, causing price fluctuations.

At the talks on Thursday and Friday, the proposal to increase oil production by 400 thousand barrels per month from August to December,
and to extend the current cut-off agreement until the end of 2022 was supported by a majority of members States. 

the objections of the United Arab Emirates

An agreement was reached based on the objections of the United Arab Emirates and is reportedly unavailable.

The UAE reportedly opposed the proposal because of its desire to “increase the share of production.”

The energy and oil ministers of the 13-nation OPEC led by Saudi Arabia and 10 non-OPEC oil-producing countries
led by Russia continue their 18th ministerial meeting today.

At the 15th ministerial meeting on April 1, the group decided to gradually increase daily oil production for May, June, and July.

The Saudi Arabia announcement 

On the other hand, Saudi Arabia announced that it will gradually lift the decision to reduce the additional 1 million barrels per day,
announced in February and voluntarily implemented.

Recently, the production schedule was in excess of 0.4 million barrels per day in a monthly increase until December.

At this value, the market is likely to still undersupply in the second half of the year.

The result will be a further increase in oil prices. 

In this case, only a new nuclear agreement with Iran including the lifting of U.S. sanctions or another wave of Corona with large-scale movement restrictions could prevent the increase.

On the other hand, uncertainty in demand caused by new types of COVID-19 variants continues to strain prices.

While the rapid spread of the Delta variant around the world is raising concerns about a new wave,
quarantine measures
were taken again in many countries and travel restrictions on the agenda are again negatively affecting oil demand expectations.

Why is the UAE standing in the way of OPEC’s decision on production in August?

The UAE government does not oppose increased production but wants to adjust its production share within the cartel upward.

By increasing its record share, Abu Dhabi could increase its oil production,
but this would reduce production shares in other member countries.

Negotiations will continue for the third day on Monday. Aside from these discussions,
the day must be relatively quiet given the absence of American traders due to the public holiday.

OPEC has done a very good job of asserting its interests over the past few months.

But now the opposition within the coalition is affecting the way things work.  

The negative views of consumers are certainly not a critical topic within OPEC.

However, the slow increase of 0.4 million barrels per day has a strong and stubborn critic in the form of the United Arab Emirates. 

The UAE oil minister insists they be allowed to deliver more oil.

This can be done by adjusting shares, increasing overall funding, or ending mutual commitment in April 2022 at the latest.

The reason for progress in the development of productive capacities, one-third of which is currently disabled.

After two days of failed negotiations last week, the OPEC coalition’s oil ministers will try to make a decision today.

There were no rumors of any hint of success. That’s why it remains interesting.

Oil prices are likely to turn one way or the other unexpectedly.

Negative trading in Tokyo

East Asian stock markets showed no steady trend at the beginning of the week on Monday.

But the decline was obvious in Tokyo and Hong Kong. 

In Tokyo, the Nikkei 225 index lost 0.6 percent to 28598 points.

In contrast, indicators have barely moved elsewhere in the region and also in Sydney.

The Caixin Purchasing Managers’ Index of China’s services industry fell compared to the previous month. 

In the United States, Dow & Co grew after creating more new jobs in June than expected.

However, due to the simultaneous development of moderate wages, market interest rates showed no upward reaction;
On the contrary, it has fallen somewhat, which has been positively received in stock markets.

As a negative factor in Japan, market participants pointed to the yen,
which rose to 111.12 from about 111.60 against the dollar compared to the same time on Friday. 

The dollar was said to suffer from low market interest rates.

The latter is also the cause of weak stocks in the financial sector,
especially since the Japanese 10-year yield fell slightly.


Upcoming OPEC meeting.. The Japanese stock market is in the red zone