The oil market is now focused on the upcoming OPEC meeting on September 5, where the cartel will discuss production quotas after September. CME's OPEC+ Watch Tool indicates that markets are laying down an 18.7% chance of production cuts, creating a potential selling overhang if these forecasts do not materialise.
In addition, we need to pay attention to the continuing deterioration in GDP growth forecasts for the global economy and Europe's drive to save energy.
Over the medium to long term, economics invariably emerges as the winner compared to geopolitics. And now, the situation is shaping up for where the fight reaches intensity, followed by a turning point. The next few days will likely determine the trend for many months.
