On July 1-2, a meeting of OPEC members and countries outside the organization was held in Vienna. Approximately ⅔ of the world’s oil reserves are mined and exported by OPEC countries.
Participants of the meeting are concerned about the instability of US-China relations. They are also unhappy with Trump’s policy to increase crude oil reserves and his interest in further lowering oil prices for their own political goals.
For financial markets, the meeting brought 2 positive solutions:
1. Oil production will be cut by more than 1 million barrels/day during the next 9 months. Russia will reduce production by 228 thousand barrels.
2. OPEC+ (14 OPEC member countries and their partners) signed a joint cooperation document to support the commodity asset and increase global oil demand.
The progress in reducing production will be monitored by the Joint Ministerial Monitoring Committee (JMMC). The committee should examine the supply and demand of the raw materials market and report on the results.
The meeting participants managed to prevent significant volatility in the market. Taking into account the significant geopolitical uncertainty, representatives of the countries noted signs of improvement in the oil market.