Global Oil Market on Edge Ahead of OPEC+ Meeting

OPEC

The global oil market is in OPEC+ walk-up mode.

That should keep prices supported this week ahead of the (now online) gaggle, which falls on June 2.

After that, price direction hinges on the immediate fallout from the meeting, plus bets about the market’s 2H trajectory.

Conventional wisdom points to an extension of the cartel’s current curbs, especially as weakening near-term timespreads suggest that physical conditions aren’t quite as tight as they have been of late.

Bloomberg’s Grant Smith, a well-seasoned OPEC+ watcher, leans that way, and that looks to be a sound call.

The existing reductions amount to ~2 million bpd, and the tap-tightening has contributed to a growing volume of unused capacity — a theme that may get an airing.

Crude’s sentiment this week will also be shaped by indications of just how strong Memorial Day weekend demand has proved to be in the US as the country embraces the start of the traditional driving season and takes to the roads (and skies).

Early signs have pointed to a solid showing, both on the highways and in the skyways.