With the sharp decline in international crude oil futures prices, domestic crude oil futures continue to consolidate weakly. As of Thursday’s close, SC crude oil futures fell 2.15% to close at 519.3 yuan/barrel, with positions reduced by more than 3,000 lots to 24,947 lots.
International oil prices rose on Thursday. As of the close of the day, the December contract of WTI crude oil futures rose by US$0.25/barrel to close at US$81.59/barrel, an increase of 0.31%; the January contract of Brent crude oil futures rose by US$0.23/barrel and closed at US$82.87/barrel, an increase of 0.31%. is 0.28%.
The OPEC monthly report released on Thursday night showed that OPEC lowered its forecast for world oil demand growth in 2021 to 5.65 million barrels per day (a decrease of 160,000 barrels per day from the previous value). ; Keep the global crude oil demand growth forecast in 2022 unchanged at 4.2 million barrels per day, and the global economic growth forecast in 2022 and 2021 at 4.2% and 5.6% respectively.
According to relevant media reports on Thursday night, the Iraqi Oil Minister said that OPEC+ is gradually increasing production. The goal is not high oil prices, but to maintain stable global oil supply. Iraq will adhere to OPEC+’s production reduction policy and will not consider seeking any exemptions from production cuts now or next year. OPEC+ is expected to maintain its policy of gradually increasing production by 400,000 barrels per day at its December meeting.
The high inflation in the United States has put US President Biden under a lot of pressure. On Wednesday, the inflation data released by the United States were “off the charts”. The CPI in October increased by 6.2% year-on-year, the highest level since December 1990. After the release of U.S. inflation data for October, Biden said reversing inflation was a top priority, especially in the energy sector.
On the sidelines of the Glasgow Climate Change Conference, senior energy department officials from Russia and the United States discussed the stability of the oil market. According to a statement issued by the Russian Ministry of Energy, Russian Deputy Minister of Energy Pavel Sorokin and US Deputy Secretary of Energy David Turk discussed bilateral cooperation in the international energy market and multilateral actions within the G20 to stabilize the global oil market.
Tass news agency stated that face-to-face meetings between Russian and US government officials are rare. In the energy sector, such meetings are even rarer. Some analysts said that after its request to OPEC+ to expand production failed, the United States is actively looking for all possible ways to increase oil supply.
Biden previously stated that the U.S. government has many other tools in its toolbox, such as using the U.S. Strategic Petroleum Reserve (SPR) to lower oil prices.
“The recent sharp decline in crude oil is mainly due to macro factors, that is, after U.S. inflation exceeded expectations on Wednesday night, the market’s expectations for the Federal Reserve’s interest rate hike in 2022 increased rapidly, and the dollar’s surge had a negative impact on commodities. “Suppression.” Liu Shunchang, an energy analyst at Nanhua Futures, told reporters that after the U.S. CPI rose to a 30-year high in October, we saw from the Eurodollar futures market that the market’s expectations for the Federal Reserve to raise interest rates are advancing rapidly, and it is expected to raise interest rates in June 2022. An interest rate hike of 25 BP and 50 BP in December 2022 is equivalent to three interest rate hikes. The U.S. dollar index has hit a new high since the end of June, which will be negative for commodities and crude oil.
Liu Shunchang said that it is expected that the fundamentals of crude oil will remain strong this year and oil prices will maintain high oscillations, but pressure will increase next year.
“Specifically, EIA raised its crude oil demand forecast for the fourth quarter in the latest short-term energy outlook. The crude oil market in the fourth quarter is still in a stage of short supply, mainly from OPEC+’s moderate production increase, Crude oil demand is driven by fuel switching in the power generation sector under high natural gas prices and the rebound in crude oil demand after some countries relax travel restrictions. At the same time, the EIA has lowered the growth rate of crude oil demand in 2022 and raised the growth rate of U.S. crude oil production. The crude oil market in the first quarter of 2022 There is a high probability that the current shortage of supply will shift to a balance between supply and demand, that is, as time goes by, the pressure on oil prices will increase,” Liu Shunchang said.
Looking at the future oil price trend, Liu Shunchang suggested paying attention to changes in three factors: First, the rhythm and timing of the market’s expectations for the Federal Reserve to raise interest rates. If inflation continues to exceed expectations, the market will advance expectations for a rate hike by the Federal Reserve again, and the tightening of U.S. dollar liquidity will accelerate, which will be detrimental to commodities and crude oil. The second is US President Biden’s attitude towards oil prices. Finally, there are the Iran nuclear negotiations. A new round of Iranian nuclear negotiations is about to begin on November 29. Although the market is generally not optimistic about the progress of the negotiations due to the coming to power of Iran’s hardline President Raisi in June this year, there is still great uncertainty about the incident and requires close attention.
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