OPEC’s Joint Ministerial Monitoring Committee (JMMC) met last weekend in Jeddah, Saudi Arabia and reports suggest it's prepared to recommend that OPEC and OPEC+ rollover their production restraint deal for the rest of 2019 when the full group of ministers convenes in Vienna in a little over a month. This would, of course, be a continuation of the status quo.
However, perhaps the most significant news out of the meeting is that OPEC will probably change the date of its upcoming ordinary meeting from June 25 to the first week of July. The OPEC and OPEC+ meetings may as a result even fall on July 3 and 4, which coincides with the Independence Day holiday in the United States, when U.S. markets are closed and no one in the U.S. will be near his or her office.
Indeed, there may be only one man watching cable news and business channels that day. His name is Donald Trump, and he just happens to be the one person able to impact oil prices with no more than a single tweet.
The word on the street is that OPEC may be moving the meeting to July in order to accommodate the scheduling needs of Russian oil minister Alexander Novak. However, a meeting in the first week of July would also help prevent massive trading in the market that might result from a disagreement amongst participating countries.
European and Asian traders are also more likely to be on vacation in July. Trading is typically lighter as people spend time with their families and outside. However, President Trump is known to be more active on Twitter and more vocal about issues like oil prices during such holiday periods. If Trump feels that oil prices might move higher because of OPEC decisions (meaning a rollover of the current production quotas), he may call out OPEC and Saudi Arabia, in particular, for not increasing production.
The big issue at the upcoming OPEC and OPEC+ meeting is whether other producing countries believe Trump’s claim that Saudi Arabia will increase production to offset missing Iranian exports. Since Trump announced that sanctions on Iranian oil would be tightened almost a month ago, he has tried to calm the oil market by insisting that Saudi Arabia had promised to make up the difference. In response, Saudi Arabia has done a good job of reassuring other OPEC countries that it does not have a separate deal with the United States and that its oil production will remain within the bounds of the OPEC quotas. However, this is bound to be a big issue at the upcoming meeting.
If other countries think Saudi Arabia will pump more oil to satisfy the U.S. government, then there will be no reason for them to stick to any production quotas. Of course, that would play directly into Trump’s hands, because the end of the production deal would send oil prices down right in the middle of the summer driving season in the United States.