No Major Surprises Expected from OPEC Meeting
A meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna is scheduled on June 2nd. Chinese manufacturing data ahead of OPEC meet to remain a key driver for oil prices. OPEC meeting is unlikely to yield any formal consensus on curtailing production.
The June 2, 2016, meeting will be held amid a backdrop of oil prices near $50 per barrel, a sharp drop in Nigerian production due to sabotage, turmoil in Venezuela, Saudi Arabia operating with a new oil minister, and Iran aggressively pumping close to pre-sanction levels.
“OPEC has no reason to cut production at this point when the market is already moving back to an equilibrium,” said Neil Beveridge, a senior analyst at Bernstein Research. “My expectation for the meeting is very limited.”
Crude prices briefly topped the psychological $50 a barrel last week for the first time this year as production disruptions in Canada and Nigeria eased short-term concerns about abundant global supplies. Chinese manufacturing data due on Wednesday is likely to set the tone at mid-week. China is the world’s largest energy consumer so any indication of how its economy is performing acts as a key driver for oil prices.