Last night, oil prices at home and abroad suddenly rose. During the U.S. stock market, the main fuel contract rose by 2% during the day, WTI crude oil increased by 2% during the day, and Brent oil rose by more than 1%. However, the market suddenly changed early this morning, with U.S. and Burundi oil prices plunging, both falling by more than 1% during the day. As of the close, international oil prices fell for three consecutive times to a new low in more than a week.
According to the latest report from Reuters yesterday, on Wednesday local time, a bipartisan group of members of the U.S. Senate Judiciary Committee reintroduced the “NOPEC” (“No Oil Production and Export Cartels Act”) to allow the federal government to take action against OPEC’s manipulation of oil. prices to promote fairness and stability in global oil markets.
Senator Chuck Grassley, who sponsored the bill, said: “Time and again, we have seen OPEC members collude to control global oil prices, causing uncertainty and high oil prices for consumers around the world. Our bill aims to provide OPEC with Member states have shown that we will not tolerate their blatant breaches of antitrust rules.”
If passed by committees, the House and Senate and signed by President Joe Biden, the bill would not only change U.S. antitrust law but also repeal sovereign immunity that has long shielded OPEC and its state oil companies from lawsuits.
For more than two decades, several attempts to pass “NOPEC” have worried Saudi Arabia, OPEC’s de facto leader. Each time a new version of the bill emerged, Saudi Arabia lobbied heavily before the bill was voted on.
Late last year, the bill passed the committee with a vote of 17-4 after OPEC+, led by Saudi Arabia and Russia, agreed to cut production by 2 million barrels per day.
“OPEC and its members need to know that we are committed to stopping their anti-competitive behavior,” Grassley said.
Another supporter of “NOPEC”, Democratic Senator Amy Klobuchar, added: “The current law makes the Department of Justice unable to prevent the 13 largest oil-producing countries from manipulating prices and raising costs. ‘NOPEC’ will allow U.S. antitrust laws to These oil producers are in effect. No one is above the law. If OPEC continues to demonstrate its willingness to engage in illegal, anti-competitive and extortionate tactics to enrich its members at the expense of consumers, it is time to change this It’s a situation.”
Angolan Oil Minister: OPEC does not need to increase production! Saudi Arabia also begins to raise prices
OPEC has vowed to stick to its production plans amid uncertainty over global demand and Russian supply prospects, setting a floor for global oil prices. Russia plans to cut production by 500,000 barrels per day in March after the Group of Seven and its allies capped Russian seaborne crude oil export prices at $60 per barrel.
However, OPEC still has no intention to increase production. Angolan oil minister said on Wednesday that OPEC did not need to increase oil production to make up for Russia’s production cuts.
Previously, Saudi Arabia has raised the price of crude oil to Asia and Europe in April. Its main product, Arabian Light Crude Oil, has a premium of US$2/barrel to the average price of Dubai/Oman, which is 50 cents higher than the price in March. It is in line with previous market expectations. The hike was in line with 55 cents.
The price of Saudi crude oil sold to the United States remained unchanged in April, while the price of oil sold to northwest Europe and the Mediterranean region increased by up to US$1.30 per barrel.
As the world’s largest oil exporter, Saudi Arabia exports about 60% of its crude oil to Asia, most of which are long-term contracts. Saudi Arabia reviews contract pricing every month. China, Japan, South Korea and India are its largest buyers. Saudi Arabia’s crude pricing typically prompts Gulf producers such as Iraq and Kuwait to follow suit.
Some analysts believe that the price increase shows that Saudi Arabia is optimistic about oil demand.
Market participants: Crude oil has exhausted its early profits and is slowly bottoming out
Talking about the recent “V”-shaped reversal in oil prices, Tong Chuan, a researcher at the Energy Investment Research Department of Galaxy Futures, told the Futures Daily reporter that the previous hawkish speech by the Federal Reserve Chairman had plunged oil prices, which also verified that the “wage-inflation” spiral is difficult to solve. Next, the Federal Reserve will raise interest rates to control inflation. Crude oil’s early profits have been exhausted, and the short-term market is dominated by macro-negatives. At the supply and demand level, expectations of Russian oil production cuts and China’s consumption growth have not been falsified. Microscopically, attention is paid to the accumulation of refined oil products in the off-season. After digesting the macro sentiment in the short term, there is support, and oil prices maintain a high oscillation pattern.
From a fundamental perspective, according to Tong Chuan, in terms of supply and demand, OPEC Secretary-General Gass said that with the recovery of China’s consumption, oil demand will increase by 500,000 barrels to 600,000 barrels per day in 2023. Global oil demand is expected to grow by 2.3 million barrels per day in 2023. The Saudi Foreign Minister said that the decisions taken by OPEC+ countries on oil production reflected a consensus within the alliance. There were previous reports of disagreements among member states. EIA predicts that U.S. crude oil production will increase to 12.44 million barrels per day in 2023 and further increase to 12.63 million barrels per day next year. API data shows that as of last week, U.S. commercial crude oil inventories fell by about 3.8 million barrels, gasoline inventories increased by about 1.8 million barrels, and distillate inventories increased by about 1 million barrels.
On the macro front, Federal Reserve Chairman Powell said at the hearing that so far, core economic growth, except real estate, hasThere are few signs of inflation coming back in the financial sector. The Fed will likely need to raise interest rates more sharply than expected and is prepared to take stronger action if future “aggregate” information points to the need for tougher measures to control inflation. The market expects the probability of the Federal Reserve to raise interest rates by 50 basis points at the March 21-22 policy meeting is over 70%, far exceeding the 30% before Powell’s speech.
Dong Dandan, chief analyst of CITIC Futures Energy, believes that there are positive signals on the supply side of the crude oil market. EIA released monthly supply data showing that U.S. crude oil production in December fell to the lowest since August 2022, only 12.1 million barrels per day. EIA monthly data are more accurate than weekly data, confirming the fact that U.S. production growth has been and will be limited in the future. Baker Hughes data shows that the number of U.S. oil and gas rigs has also declined for three consecutive months. The U.S. production increase is limited, and the united OPEC+ will continue to control oil market supply.
“Looking ahead to the market outlook, the monthly spread of crude oil and the crack price spread of refined oil products have continued to rise in the past period, which is consistent with the unilateral trend. Next week, Saudi Arabia will announce the April OSP, and the price increase may be relatively high, which is another impact on the crude oil market. Boost. Oil prices have slowly stepped out of the bottom pattern, and the trend of rising shocks in the later period has become more clear.” Dong Dandan said.
In terms of fuel oil, Tong Chuan said that the rebound in ship fuel demand and the slight rebound in refined oil profits have supported the slight rebound in low-sulfur cracking. However, the demand for low-sulfur power generation has declined and the supply in the Middle East has definitely increased. Low-sulfur cracking has oscillated at a low level. It is recommended to wait and see; In the medium term, with the reduction in Russian refined oil exports and the recovery of European and American industrial and travel demand, the upward trend in refined oil profits will support the recovery of low-sulfur cracking to a certain extent. The volume of Russian fuel oil shipped out of the port this week was less than expected. Coupled with the bullish news about Russian oil that is not priced in Singapore, it is recommended to continue to narrow the low-sulfur price gap on rallies. As the demand for high-sulfur cracking for ship fuel and seasonal power generation gradually increases, there is room for further growth in the short term, so it is prudent to go long.
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