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It has always been troubled by production benchmarks and output quota issues. Historically, proposals for allocation based on current production, nominal production capacity, historical production, proven reserves, population size, income requirements, and development needs (per capita) have appeared, but even which one is most applicable or fair has not been reached. consensus in principle. In fact, it is usually Saudi Arabia that decides how much to produce and convinces the United Arab Emirates and Kuwait to accept quotas while member states such as Iran and Iraq, struggling under war, unrest and sanctions, can produce as much crude as they can.
The author Ji Zilin believes that because economic issues and political issues are intertwined, even if the final agreement is reached, it is likely to be very vague. First, for selective exemptions, this may be specified in the final agreement, or member states may be allowed to declare separately. This strategy has also been used. At the same time, the baseline can be very ambiguous, and different members can even be given different reference intervals. In extreme cases, member states may simply give up setting a fixed baseline and simply announce how much production each country will reduce. This is not without precedent.
However, the meeting on September 1 is a ministerial meeting, and the issue of regional power cannot be resolved at the ministerial level. The question is, will competition for influence among Saudi Arabia, Iran and Iraq hamper a deal amid divergent regional power structures?
The latest news from Saudi Arabian crude oil giant Aramco () shows that the company plans to increase crude oil supply to some Asian customers next month to further defend its market share. There are various indications that Saudi Arabia will not give up market share to others in order to reach an agreement on production reduction at the meeting on October 1. Therefore, Saudi Arabia is not expected to reduce production alone without the cooperation of other oil-producing countries.
U.S. oil services company Baker Hughes () released data on Wednesday (June 2) showing that the number of active oil drilling rigs in the U.S. increased by 100% in the week ended 2020. So far it has been the largest in a month. Due to the U.S. Thanksgiving holiday on Thursday, Baker Hughes's rig count statistics has been advanced to Wednesday. Currently, the number of active oil rigs drilling in the United States has reached 1, the highest level in a month this year. In the past week, the number of active oil rigs drilling in the United States has increased cumulatively. In addition, the total number of active oil and natural gas drilling rigs in the United States increased by 10 rigs and decreased by 1 rig compared with the same period last year.
Short-term analysis of spot crude oil:
Judging from the daily chart, oil prices have plunged sharply and fallen below the support of the US dollar. For now, oil prices have fallen below the middle track of the Bollinger Bands. It is expected that the next It is a short pattern, and the probability of further decline is relatively high. From the perspective of indicators, the line fell below the middle track of the Bollinger Bands, the indicators in the attached picture slowly moved downward, and the green kinetic energy column volume indicator crossed downwards. Taken together, the technical aspect shows that oil prices are likely to fall further. They have already fallen below the US dollar. However, they can still rebound short with a small tentative stop loss, and follow orders if the position is broken. So, whether it will continue to fall or pull back next week depends largely on the reaction to the news. The meeting is approaching, and the possibility of something going wrong in the market cannot be ruled out. We must operate flexibly to avoid unnecessary losses.
For monthly spot crude oil, you can refer to the operation suggestions:
, Oil prices hit. Short positions and long orders, stop loss. USD, target is near the USD
, Oil prices rise. USD short positions, stop loss .USD, the target is around .USD
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