Today, the central event of the day will be the OPEC+ summit in St. Petersburg. This will be the first official meeting of the pact participants which is aimed at reducing the volume of crude oil production for the sake of price increases.
The last meeting was in May and the results was a simple extension of the agreements made last December. Against this backdrop, not only did the oil quotes not rise, it fell as the decision of the OPEC+ showed the inability of the participants in the deal to take something more decisive than the promises, forecasts, and empty conversations.
As expected, at the summit in St. Petersburg, the OPEC+ will try to press on Libya and Nigeria. These countries actively extract oil and "discredit" the very idea of reducing the volume of crude oil production. Production in Libya grew by 17.5% for this month. This is a growth to 852,000 barrels per day. Meanwhile, Nigeria added about 6.0% or 1.733 million barrels per day.
Whether it will be possible to do it at the summit or not, it's hard to say. Due to the difficult economic situation, these countries were exempted from the mandatory reduction of oil production. However, at the same time, along with the US shale, they supported not only the high volumes of oil entering the world market but also contributed to their growth. Although, justice demands that other countries such as Saudi Arabia and Russia, also commit this sin.
What the results of the meeting will be is hard to say but, in our opinion, it is unlikely that a breakthrough will happen. Nigeria and Libya will demand something in return. And what can OPEC offer them? Nothing except a probable local increase in the price of "black gold."
With regard to the Russian currency, we note that the absence of real decisions will push the ruble further downwards against the US dollar and the euro which are already under pressure due to the conversion of ruble dividend by non-residents and the end of the tax period factor coupled with the absence of the outcome of the summit. All of these will only strengthen its fall.
Forecast of the day:
The AUD/USD currency pair consolidates after reaching a local maximum on the wave of weakness in the US dollar as well as positive dynamics in the economies of Australia and China. The central event for the "Australian dollar" will be the publication of inflation data this week. However, for now, it is likely that the pair will move in the range of 0.7890-0.7985.
The USD/JPY currency pair fell to the level of 111.00 against the background of a weak dollar. There is a possibility that the pair will make an attempt to further decrease to 110.30 if it falls below the level of 111.00. If this does not happen, there is a possibility of local growth on the wave of overselling to 111.50-55.
