Optimistic forecasts on oil prices, nuclear talks with Iran, and upcoming OPEC+ meeting. How to trade oil these days?
What Will a New OPEC+ Meeting Mean for the Oil Market?
What will happen?
The Organization of the Petroleum Exporting Countries and 10 additional oil-exporting countries, including Russia, will hold a videoconference on July 1. After the optimistic outlook on the oil demand provided by the alliance last month, traders will focus on other remaining issues. The first of them is related to the negotiations over Iran's nuclear deal. Despite significant progress, Iran and the world powers are still far from the deal. That is, the future of the additional oil output from Iran remains uncertain. Another issue is Russia’s plans to boost its oil output. An increase in oil supply will drive the oil prices down, which may not be appreciated by Saudi Arabia. Given all the facts above, the meeting is going to create volatility in the oil market.
How to trade on the OPEC+ meeting?
- If the recovery optimism is stronger than supply increase fears, the oil price may rise;
- Otherwise, it may drop.
Instruments to trade: XTI/USD, XBR/USD
The Reserve Bank of Australia (RBA) will hold a meeting and announce changes to the monetary policy on August 3, at 07:30 MT time (GMT+3).
What events to follow and how to trade during the week of July 2-6?
EUR/USD retraced to 1.1870 after breaking out this level. It should be just a natural sell-off ahead of the further rally up.