All is well in OPEC land. OPEC kept it together with a unanimous deal, even though there is still disagreement on what the deal in Vienna means. Post OPEC, we have a rising dollar on China/U.S. trade tensions and a major Canadian oil sands outage that will buoy U.S. prices.
OPEC agreed to a modest lift in output of 1,000,000 barrels per day (B/D) at the 7th OPEC International Seminar in Vienna. Further inspection reveals that the actual increase will be approximately 700,000 (B/D) due to capacity constraints, as some member countries don't have the means to produce more oil. Traders will note that the delta of 300,000 (B/D) will be significant in real terms.
DB1, CME: the ECB working group on euro risk-free rates is calling on market participants and interested parties to comment on its assessment of candidate euro risk-free rates against key selection criteria. The new euro risk-free rate will replace EONIA, which will no longer meet the criteria of the EU Benchmarks.
Today’s news cycle is providing a reprieve from yesterday’s pressure and U.S. equity markets are responded thus far. U.S. benchmarks traded lower into the bell and although the S&P 500 and Russell 2000 secured outside bearish daily settlements, both the S&P 500 and Nasdaq failed to close below our major three-star support, which would have signaled further immediate downside.
The historic OPEC NON-OPEC production agreement became known as OPEC plus one. Russia became that plus one as they joined OPEC and conspired with them to reduce production and ultimately raise production and reduce supply. As OPEC meets today it is OPEC minus one. Iran seems to be the lone holdout from a production deal that’s on paper.
The week started with the US and China announcing tariffs against one another which will come into effect on 6 July, and it will end with the European Union announcing counter-tariffs against the world’s largest economy in response to those already imposed. While much of what has been announced this week was already anticipated, the rhetoric between these huge trading partners is heating up and that’s a major concern for investors.