Technical & Fundamental Oil Reports Specialists

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Oil faces strong headwinds

Published Thursday, May 28th, 2015

There are 3 key events taking place in June of huge importance for the future direction of oil prices. In the first week of June we will know if OPEC are still committed to preserving market share rather than supporting prices. We will also know if Greece has defaulted and the reaction of the currency markets to such an event and, at the end of the month, we will know if an Iranian nuclear deal has or is going to be done.

All the signs are that OPEC will continue with its current strategy, taking any immediate prospect of a strategy reversal to support price off the table. Although widely anticipated, confirmation will put pressure on oil prices. As for Greece the stories coming out of Athens and Brussels continue to contradict each other. Athens claimed yesterday that a draft agreement was being written, a claim denied by sources in Brussels and dismissed by Wolfgang Schauble as having no substance. If Greece defaults the euro will move towards dollar parity but it is not obvious that it will strengthen very much if a deal is cobbled together.

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Posted by David Hufton