The OPEC Meeting concluded on Saturday with the support of the non-OPEC countries (OPEC+), led by Russia, by far the largest producer of the group. What was impressive about the statement was that the 23 producing countries are supposedly now in agreement that the cuts agreed back in April should be maintained throughout the month of July and furthermore, should be strictly adhered to.
The main OPEC defaulters were Iraq, Nigeria, and Angola, and it is understood that Iraq and Nigeria have both given their commitment to honouring the agreement. In the background, of course, we are not fully aware of any output that may surprisingly appear from Libya, the current OPEC member fraught with civil war. Iran, suffering from US sanctions, has manged to supply five tankers of product to fellow OPEC member Venezuela, also suffering from US sanctions. However, the real issue for Venezuela is that its infrastructure has been neglected for so long that output is restricted anyway but, of course, as the US is its traditional major customer, it is suffering more than most by not being able to export whatever product it can produce.
During the Meeting, it was observed that as it was being held on a Saturday, a day when there was no trading as such, there would not be an immediate market response. President Trump has no doubt taken some credit for this outcome, having exerted further pressure on both Saudi and Russia. However, conjecture always plays a role around OPEC Meeting, and it was noted that the OPEC basket price increased over the Friday by almost two dollars in anticipation, although yesterday, Monday, the price of both Brent and WTI had fallen.
Again, we have to measure market aspirations against a background of insecurity over the extent of the COVID-19 virus, civil unrest, and the extent of global recovery with China and the US very much in the focus while stocks remain at record high levels.