After a rare nine consecutive positive days in history, oil prices have unknowingly closed in negative territory for three consecutive weeks. At last week’s OPEC+ meeting, major oil producer Saudi Arabia rejected calls from major crude oil consuming countries including the United States, Japan, India and other major crude oil consuming countries for OPEC+ to speed up the increase in oil supply, citing economic difficulties. The Saudi oil minister was worried about increasing production too quickly. We have encountered another setback in the fight against the epidemic and economic recovery. The White House believes that oil prices have become the most important issue and stated that it will take options including releasing the Strategic Petroleum Reserve (SPR) and re-implementing the crude oil export ban as needed. The United States banned the export of crude oil for 40 years, and the ban was only lifted at the end of 2015. However, neither option is a perfect solution. Experts warn that drawing down strategic reserves may have only a small impact on consumer prices, while reinstating export bans could further disrupt markets.
The direct differences between the core major countries in crude oil supply and consumption have made the market highly nervous. Obviously, the outcome of the OPEC+ meeting in November is very It is difficult to satisfy the market, especially the consumer side. The decision of oil-producing countries represented by Saudi Arabia is not conducive to the recovery of the global economy. Oil prices fell after rising, and the weekly level closed the third negative line in a row. Judging from seasonal performance, oil prices seem to have begun to show an inflection point, but still show a high oscillation pattern. In a situation where reality is strong and expectations are weak in the crude oil market, more influential factors still need to emerge for oil prices to break.
Last weekend, Saudi Aramco raised the selling price of Arabian Light crude oil to Asian customers in December by US$1.40-2.70 per barrel. Make the market quite nervous. Previous surveys showed that the market had expected the state-owned producer to raise prices by US$0.5 to US$1 per barrel. More than 60% of Saudi Arabia’s crude oil exports are sold to Asia, with China, South Korea, Japan and India being the largest buyers. This week, Iraq, Kuwait, Iran and other countries followed up and raised their selling prices. Kuwait set the official selling price of crude oil sold to Asia in December at a premium of US$2.15/barrel to the average price of Dubai, Oman, and Iran set the official selling price of crude oil sold to Asia in December. The official selling price of light crude oil is set at a premium of US$2.5/barrel to the average price in Dubai, Oman.
The increase in official selling prices by Middle Eastern countries exceeded market expectations, which means that actual actions seem to be optimistic about the recovery of global crude oil demand. However, in fact, the outlook for OPEC’s monthly report on Wednesday Crude oil demand has become noticeably cautious. Due to rising energy prices, OPEC judges that the pace of recovery will slow down in the fourth quarter of 2021. The group also cited slower-than-expected demand in India as the reason for the downward revision. According to the latest forecast, global oil consumption will exceed the 100 million barrels per day mark in the third quarter of 2022, three months later than last month’s forecast. In its monthly report, OPEC lowered its world oil demand forecast for the fourth quarter of 2021 by 330,000 barrels per day to 99.49 million barrels per day, citing the impact of rising energy prices. The world oil demand growth forecast for 2021 has been lowered to 5.65 million barrels per day (160,000 barrels per day lower than before). This is the second consecutive month that the outlook for global crude oil demand has been lowered. Earlier, OPEC forecast world oil demand in 2021. The growth forecast is 5.95 million barrels per day.
Data released by the General Administration of Customs of China show that China’s crude oil imports fell below 38 million tons in October, setting a new record since 2018. India’s net imports of petroleum products increased by 90,000 barrels/day to 4.09 million barrels/day compared with the previous round of statistics, and the net imports of petroleum products from the United States decreased by 1.18 million barrels/day from the previous round of statistics to 340,000 barrels/day. In addition, OPEC oil production increased by 220,000 barrels per day in October to 27.45 million barrels per day.
For the United States, high inflation has put great pressure on the Biden administration. Biden said reversing inflation is a top priority, especially in the energy sector, and has directed the National Economic Council to explore ways to lower energy prices and asked the Federal Trade Commission to address “any market manipulation or price gouging.” Later, media reported that 11 U.S. Democratic congressmen, including several well-known for their focus on climate change, urged Biden to take quick action, including releasing oil from the SPR, or even using more radical measures to ban U.S. crude oil exports to solve the problem. The problem of rising gas prices. Oil prices have moved higher this year as consumption rebounds after the epidemic, pushing U.S. consumer prices to the fastest pace in 30 years. Soaring fuel and energy costs are also adding to inflationary pressures around the world.
The EIA inventory report showed that U.S. crude oil inventories increased by 1.002 million barrels in the week ended November 5, marking the third consecutive week of increases and reaching the highest level since August. In addition, in the week ending November 5, U.S. gasoline inventories decreased by 1.555 million barrels, compared with an expected decrease of 850,000 barrels, and the previous value decreased by 1.488 million barrels; U.S. refined oil inventories decreased by 2.613 million barrels, compared with an expected decrease of 1.995 million barrels, and the previous value increased by 2.16 million barrels. Thousands of barrels. U.S. distillate inventories fell to their lowest levels since April 2020, U.S. gasoline inventories fell to their lowest levels since November 2017, and U.S. Cushing crude oil inventories fell to their lowest levels since September 2018.
U.S. energy companies added oil and natural gas rigs for the third consecutive week. energy services companyThe total number of active rigs drilling for oil and gas, an early indicator of future production, rose by six to 556 in the week to Nov. 12, the highest level since April 2020, Cross said on Friday. The current domestic crude oil production in the United States is 11.5 million barrels per day, the highest since the epidemic. Obviously, in addition to fully increasing domestic crude oil production, the United States also needs more measures to cool down oil prices, including releasing oil from strategic petroleum reserves and considering reinstating the crude oil export ban. , but U.S. President Joe Biden has kept investors guessing on what specific steps he will take to curb rising energy prices that are driving soaring inflation.
Although the market is not overly concerned about the impact of the epidemic on crude oil demand in winter, the data we track shows that the global epidemic situation is changing. The situation continues to worsen, and many European countries have taken turns setting records for new confirmed cases in a single day, especially Germany, which is out of control. On the 12th local time, Spahn, the health minister of the German caretaker cabinet, and Willer, director of the Robert Koch Institute, the German disease control agency, jointly held a press conference to introduce the current epidemic prevention situation in Germany. Spahn said that the current epidemic situation in Germany is very serious. If no measures are taken, the incidence rate will double every two weeks. On Friday, World Health Organization Director-General Tedros Adhanom Ghebreyesus said that the number of cases in Europe is surging, whether in countries with low or high vaccination rates, which once again reminds the public that vaccination cannot replace other epidemic prevention measures. He emphasized that countries must adjust epidemic prevention measures according to their own situations and find a balance between controlling the epidemic and maintaining economic and social development. The epidemic situation in the United States is not optimistic either, and its impact on crude oil demand is inevitable.
Overall, the current supply and demand factors in the crude oil market are complex. The market focus is still on whether the United States will make big moves to further cool down oil prices. OPEC+ members are enjoying the The abundant income brought by high oil prices, while declaring to the market its indispensable contribution. “If it weren’t for OPEC+, oil prices would be higher today,” the UAE Energy Minister said at the Africa Oil Week conference in Dubai. Since the epidemic, OPEC+ has played a key role in stabilizing the crude oil market, which has once again made OPEC+’s influence on the crude oil market an irreplaceable factor. However, at this stage, the market clearly hopes that OPEC+ can do more.
Oil prices have fallen back from highs, and the sharp strengthening of the U.S. dollar is indispensable. Last week, the Federal Reserve announced at its interest rate meeting that it would withdraw from the policy implemented last year. Monetary stimulus measures will reduce monthly asset purchases by US$15 billion starting later this month. The US dollar began to rise sharply this week, setting a new high for the year. The strength of the US dollar in the next period of time is a foreseeable big rhythm. This It will also have an impact on the performance of commodities such as crude oil and copper. Although both crude oil and copper are currently at high levels, and the bull market has not ended, data shows that funds have reduced their net long positions in Brent crude oil for the sixth consecutive week, and their current positions have reached a new low for the year. For high oil prices, These professional institutions are not optimistic about the upside potential. Due to seasonal factors, oil prices may continue to be relatively weak for the remainder of this year. Of course, this does not mean that oil prices will fall sharply. Judging from the current influencing factors on the crude oil market, both bulls and shorts are in a relatively hesitant stage. There are no overwhelming unilateral influencing factors. The market needs time to adjust between high oil prices and seek a balance between economic development.
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