According to RIA Novosti news yesterday, Russian Deputy Prime Minister Novak said that Russia is about to commit to cutting oil production by 500,000 barrels per day and will implement this commitment in the next few days.
Novak said this means Russia aims to produce 9.7 million barrels of oil per day between March and June, a much lower production cut than Moscow had previously announced.
As Saudi Arabia and Syria resume diplomatic relations, “the latest diplomatic reshuffle in the Middle East”
Following Saudi Arabia and Iran, Saudi Arabia and Syria have also begun discussions to restore diplomatic relations. Reuters previously reported that Saudi Arabia and Syria are close to a “landmark agreement” and the reopening of the embassy may be in late April.
“This is the latest diplomatic reshuffle in the region.” The Associated Press said on the 24th that according to Saudi state television, Saudi Arabia is negotiating with Syria and plans to reopen its embassy in the war-torn country for the first time in more than a decade. Reuters initially reported that a source close to Damascus revealed that the two governments were preparing to reopen their embassies after Eid al-Fitr, a decision made by senior Syrian intelligence officials who had spent “a few days” in the Saudi capital Riyadh. The outcome of talks with Saudi Arabia. According to the Saudi mainstream media “Oqazi” broke the news on the 23rd, earlier this week, senior officials such as Ali Mamluk, the director of the Syrian National Security Agency, and Hussam Luqa, the director of the General Intelligence Service, visited Riyadh and met with Saudi officials held constructive secret talks on gradually restoring relations between the two countries.
The Wall Street Journal quoted people familiar with the matter in Saudi Arabia and Syria on the 24th as saying that the two countries were about to reach an agreement to restore diplomatic relations after negotiations mediated by Russia. The Russian government brokered a preliminary deal when Syrian President Bashar al-Assad visited Moscow last week, followed by visits to Saudi Arabia by senior Syrian officials in recent weeks. The report said that mediating between Saudi Arabia and Syria “strengthens Russia’s presence in the Middle East.” For the United States, the agreement is a reminder that while the United States remains the most important military and diplomatic force in the Middle East, its influence in the region is waning. For Assad, a deal with Saudi Arabia would be one of the final proofs of his victory in the brutal 11-year civil war.
According to the Global Times, after the outbreak of the Syrian civil war in 2011, Saudi Arabia firmly supported the opposition in Syria, and the two countries severed diplomatic relations in 2012. Syria was stripped of its membership status by the Arab League and fell into unprecedented political isolation. The United States and its Western allies have vigorously supported the Syrian opposition forces and imposed sanctions and influence in an attempt to overthrow the Bashar al-Assad regime. The United States still occupies a large area of northeastern Syria and controls 90% of Syria’s oil resources. The illegal U.S. troops stationed in Syria also continue to steal oil and food, exacerbating Syria’s energy and food crisis.
The United States continues to exert pressure. Just as the media broke the news that “Saudi Arabia and Syria are about to resume diplomatic relations,” the U.S. Department of Defense issued a statement stating that the U.S. military conducted multiple air strikes against “organizations allied with Iran” in Syria on the evening of the 23rd. The United States blamed these groups for a deadly drone strike earlier in the day that killed one American contractor, wounded another and injured five U.S. soldiers.
U.S. Defense Secretary Austin said the airstrike was authorized by President Joe Biden. According to reports from Syrian National Television, on the afternoon of the 23rd local time, the US military base in Hasakah Province, Syria, was attacked. Subsequently, the US military launched patrols in the area, and multiple helicopters and military aircraft were hovering over the area.
On the 23rd, when asked about the news of Saudi-Syria reconciliation, a spokesperson for the U.S. State Department said that the United States’ “position on normalizing relations with Middle Eastern countries has not changed” and that it would not encourage other countries to normalize relations with the Bashar al-Assad regime. Previously, the U.S. State Department expressed “deep disappointment and uneasiness” at the UAE’s warm reception of Bashar and stressed that the United States “will not lift sanctions on Syria.”
Market participants: Short-term crude oil supply and demand are weak. This week, WTI crude oil futures rose 3.48% for the whole week. Brent May crude oil futures rose 2.77% throughout the week.
In the news, in addition to Russia’s latest announcement of production cuts, U.S. Energy Secretary Jennifer Granholm said that replenishing the country’s Strategic Petroleum Reserve (SPR) may take years.
Granholm told Congress it will be difficult to take advantage of this year’s low prices to build inventory, which is at its lowest level since 1983 after President Joe Biden directed sales of SPR last year.
“Granholm’s comments heightened concerns about potential oversupply, especially as the Department of Energy plans to release an additional 26 million barrels of SPR under congressional authorization.” said Tong Chuan, a researcher at the Energy and Chemical Investment Research Department of Galaxy Futures. Tong Chuan further analyzed that overseas central banks are nearing the end of their interest rate hike operations, but it remains to be seen whether high inflation will be curbed as scheduled in the future. It is difficult to falsify overseas macro risks and recession expectations in a high interest rate environment. Macro sentiment is expected to recur, which will have a negative impact on crude oil. Sexual downward pressure. On the supply and demand side, the impact of Russia’s production cuts on crude oil exports is likely to be limited. Overseas and domestic refineries have entered the maintenance season one after another. Crude oil inventories have reached high levels in the off-season, but refined oil inventories are still low. Low mid- to long-term downstream inventories still have trading value, and refined oil products crack. There is support for crude oil prices. The short-term crude oil supply and demand drive is weak, and oil prices are driven upward after the United States hinted that it will slow down the pace of purchasing and storage.� is weakening. The current oil price oscillation center is lower than the previous period. The reference range of Brent oil is 70-83 US dollars/barrel. In the short term, it is expected to maintain a wide range of fluctuations.
Geographically, according to Tong Chuan, the top commander of Ukraine’s ground forces said that Ukrainian troops who have been on the defensive for four months will “soon” launch a long-awaited counterattack because Russia’s huge winter offensive failed to capture Bakhmut. is losing momentum. There was no immediate response from Moscow. In terms of supply and demand, Russian Deputy Prime Minister Novak said that Russia will deliver approximately 67 million tons of oil to China in 2022. Novak said China accounts for about a third of all Russian oil exports, adding that exports will continue to rise in the future. On the macro front, U.S. initial jobless claims fell by 1,000 to a seasonally adjusted 191,000 in the week ended March 18, suggesting there is no sign of financial uncertainty following the recent collapse of two regional banks. Market turmoil has had an impact on the economy. The Bank of England raised interest rates for the 11th consecutive time on Thursday, but said an unexpected rebound in inflation may fade quickly, sparking speculation about whether it has ended its rate hike cycle. Knot, president of the Dutch Central Bank and member of the European Central Bank’s Governing Council, said the European Central Bank may need to raise interest rates again in May to combat inflation.
CITIC Futures analyst Yang Jiaming told the Futures Daily reporter that 2023 is a big macro year, and interest rate hikes will continue to suppress commodity demand, and recession concerns will continue to suppress crude oil demand before expectations turn to reality. WTI crude oil fell below the important support level of US$70/barrel amid concerns about recession. As the Federal Reserve and major central banks released liquidity, oil prices rebounded sharply. However, interest rates are still being raised to control inflation. There are still risks of fermentation in the later stages of the crisis, and macro risks are still there. , the support level is expected to change into a pressure level. On the fundamental side, there is a high probability of demand falling as supply increases. After the oil price fell, the U.S. Department of Energy was not in a hurry to purchase and reserve, which is equivalent to the failure of the previous unbreakable bottom of $70/barrel purchase and reserve. In the later period, the oil market has a higher probability of accumulating reserves as supply increases and demand falls.
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