Commodities Week Ahead: Oil, Gold in Edgy Week of OPEC Rhetoric, U.S. Jobs
It’s July and OPEC — the Organization of the Petroleum Exporting Countries — is expected to make all the right noises and moves to try and “seize back” the narrative in oil. The trouble is the Fed will also have something to say this week on why it paused rate hikes at last month’s meeting. And then, there’s that all-important U.S. jobs report for May.
Combined, the three could lead to an edgy week for not just trades in oil but also gold and other metals and macro-influenced commodities.
On the oil front, traders and hedge fund managers will be closely watching for proof of the Saudi oil minister’s plans to make a difference to prices this month with an additional million barrels per day in output cuts.
Kicking off the bullish messaging of the Saudis and other oil producers will be the July 5-6 seminar of oil industry CEOs with energy ministers from OPEC and its allies, known as OPEC+, which include Saudi Arabia and Russia. The 23-nation alliance pumps more than 40% of the world's oil supply.
Determined to control the narrative of this meeting, OPEC is again barring Bloomberg, Reuters, and the Wall Street Journal from covering the event, similar to what it did at the last OPEC+ ministerial meeting in June.
“The focus will be on the OPEC seminar, which will likely contain an update on what the Saudis are thinking,” said Ed Moya, analyst at online trading platform OANDA.
The Saudis, who lead OPEC+, have announced three production cuts since October that would theoretically remove 2.5 million barrels per day from their production, bringing output to just around 9 million daily barrels in July.
But crude prices have only rallied briefly after each of those announcements as rate hikes by the Fed and other central banks have
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