Politics VS business: how the oil cartel will respond

Politics VS business: how the oil cartel will respond There are three days left before the joint meeting of OPEC and OPEC+, but the topic of increasing quotas by 500 thousand bpd, along with the new COVID quarantine in China, is trying to actively influence the market price. Moreover, the decisions of OPEC are unlikely to in any way affect the sanctions policy of the G7 to limit prices for Russian oil.Tomorrow, EU diplomats are planning to resume negotiations on a mechanism for monitoring compliance with the oil price limit from the Russian Federation. Recall: the range of $65-70 is being discussed so far.Key indicators signal a weak market, with both WTI and Brent actual spreads returning to contango, indicating sufficient supply in the short term.In connection with the upcoming OPEC meeting, we should pay attention to the following points: Alliance is still using the 2016 base quotas, which are no longer relevant. Some participants in the deal can no longer produce the same volume as in 2016, while there are countries that are ready to supply much more raw materials. Leading OPEC countries to record an increase in demand for their oil in Europe. G7 countries are looking for a replacement for Russian oil, and Iraq, Saudi Arabia, and the United Arab Emirates just have spare capacities. A slight increase in production quotas will be received positively by these members of the Cartel. It would be better for the market balance if OPEC reformed all base quotas to reflect current production capacity, as Saudi Arabia's energy minister hinted last month. But now such a decision is unlikely. Speculation on the idea that as soon as sanctions against Russia come into force, cooperation within the framework of OPEC+ will lose leverage is not effective. Russia maintains a close relationship with Saudi Arabia, and the Saudis understand that with Russia, OPEC has more market power than without it.So the composition of the team of the main players in the global oil market will not change.Profits to yall!#ForexChief #OPEC #forexnews #WTI #worldnews #Brent #G7 #Cartel #oil