What will OPEC+ do this coming week?

[dan_s]

RBC Capital: Helima Croft (Analyst) < One of smartest people on Earth and super expert on the global oil market
1/26/2023

OPEC JMMC Preview: Cautious Course Published January 26 2023 10:35:09 EST
Preview of Next Week’s OPEC Joint Ministerial Monitoring Committee Meeting
OPEC’s Joint Ministerial Monitoring Committee (JMMC) meets next Wednesday
and all indications suggest that they will stay the course on the 2 mb/d production
cut as they wait to assess the durability of the China reopening as well as the impact
of the next round of European energy sanctions on Russian exports. Above all, we
expect OPEC to remain aligned on charting a cautious course in 1H’23 because
of lingering uncertainty about the policy environment after Russian oil exports
remained surprisingly robust in 2022 despite sweeping international sanctions and
the early days of China easing Covid restrictions. Iran is another important oil supply
wildcard.

RBCCM Global Commodity Strategy
China’s reopening is bullish for commodities, full stop. However, there exists a bifurcation across the individual commodities. Metals are, and should lead, while consumer-based commodities like oil will follow. The impact on US natural gas prices from revisions to weather forecasts has been brutal; perhaps too brutal with prices trading through what we thought would be a near-term low. Still, we are hesitant to extrapolate from here. We still think that gold is overdone and with few signs that investors are making the risk-off allocations necessary to sustain this rally (in our view), we do think gold prices are vulnerable to Fed expectations being disappointed. Critical minerals stand to benefit from stackable IRA tax credits across the supply chain with no phase-out in sight.