Saudi Arabia Hosts Oil Meeting on June 22
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Announcement:
Saudi Arabia will host a meeting on Sunday, June 22, to address oil price and supply issues.
Description:
This Sunday, Saudi Arabia will host a meeting, where virtually all oil producers, Goldman Sachs, Morgan Stanley and the International Energy Agency (IEA) are invited. At the meeting, officials will attempt to show that the rising price of oil is not entirely due to supply issues. What’s more, Saudi Arabia agreed – on June 13 – to begin pumping 300,000 barrels per day (bpd) into the market, commencing sometime within a month.
Interestingly, according to Bloomberg News, “Saudi Arabia pumped 9.134 million barrels of crude a day last month, according to a monthly report from OPEC June 13, which cited secondary sources including analysts and news agencies. The country’s crude output was 9.25 million barrels a day in May, according to Bloomberg estimates.”
Trader Take:
Overall, with Saudi Arabia’s promise in May to begin adding 300,000 bpd into markets starting in June. The previous figure with the possible 200,000 bpd output, would still fall just short of the 750,000 to 860,000 bpd necessary to cool oil overall.
Here is the meat of it all: According to the Energy Information Agency (EIA) of the U.S. – as of June 10th – total 2008 world production is expected to come in at 86.54 million bpd, while consumption is expected to sum 86.38 million bpd.
At the end of the day, the picture on oil supply and demand is clearly mixed and this weekend’s meeting will likely have significant impact on many currency pairs, especially the EUR/USD with interest rate meetings looming from both central banks in the following two weeks.
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