International oil prices closed sharply higher on Monday, influenced by Saudi Arabia’s “price increase” and the easing of market concerns about Omicron’s anti-epidemic blockade. WTI crude oil futures rose nearly 6% to $70.15 per barrel during the session. As of early morning today, WTI January crude oil futures closed up $3.23, or 4.87%, at $69.49 per barrel. Brent crude oil futures for February closed up $3.20, or 4.58%, at $73.08 per barrel.
Driven by multiple events last week, oil prices rebounded and recovered after a sharp drop, with Brent crude oil futures falling to the $65/barrel level. The OPEC+ meeting has taken off and continues to increase production by 400,000 barrels per day. “The key points for OPEC+ to make this decision are: first, considering the release of U.S. oil reserves, OPEC+ expects that the impact of the release of strategic petroleum reserves SPR will be small, because part of it is released voluntarily and part is released through transactions. The second is At the current time point, the adjustment effect of increasing production and the impact of the Omicron variant on oil demand may be offset, because the spread ability and severity of the new virus are still unclear. In addition, the prospects for Iran’s negotiations are not optimistic, and Iran’s performance The attitude is relatively tough, and it is premised on the early lifting of sanctions on Iran by the United States, so the market is beginning to discount this factor.” said Zhong Meiyan, director of energy and chemical industry of Everbright Futures.
The person in charge of Haitong Futures Energy and Chemical Industry believes that based on the assessment of the latest OPEC meeting, after the United States and many countries launched the strategic reserve crude oil release plan, the OPEC expert group estimated that if consuming countries release strategic oil reserves within two months ( SPR) of more than 60 million barrels of crude oil, then the global market excess supply will increase by 1.1 million barrels per day in January and February next year, reaching 2.3 million barrels per day and 3.7 million barrels per day. In addition, from the perspective of the U.S. market, oil prices have entered a seasonal accumulation stage. High-frequency data last week showed that the accumulation of full-caliber oil products in the U.S. market exceeded expectations, and there are signs of acceleration in the later period.
On the spot side, market sentiment has eased slightly. Among them, the Saudi official selling price premium for December announced over the weekend has increased compared with the previous month. Saudi Arabia has a very light premium of US$5.85/barrel, which is US$2.8/barrel higher than the premium in November; Saudi Arabia has exceeded The slight premium for water is US$4/barrel, which is an increase of US$2.2/barrel from November’s premium. In addition, the center of gravity of the OPEC basket of oil prices has also shifted slightly upward.
As global liquidity tightens from expectations to gradually taking effect, the macro-level driving force for the rise of commodities gradually fades. With the continuous growth of supply and the strategic crude oil release work of consuming countries, the gap between supply and demand in the crude oil market continues to narrow, and is expected to There will be a glut again in the first quarter of next year, which will put oil prices under greater pressure in the coming period. “We have tracked and found that speculative net long positions in the global crude oil market have accelerated their departures, which means that professional institutions, including funds, are pessimistic about the outlook for crude oil. In the short term, oil prices will recover and rebound, and the extent is expected to be limited. In the medium term, the crude oil market It is still relatively weak. If the market gives some room for rebound, customers with hedging needs can consider hedging risks to prevent the oscillating downward trend caused by seasonal weakness in oil prices.” said the person in charge of the above-mentioned energy and chemical industry.
Looking forward to the market outlook, Zhong Meiyan believes that the outcome of the OPEC+ meeting will change the length of time that crude oil prices will fall. At present, oil prices will enter an oscillation rhythm due to the frequent switching of rapid rises and falls in recent weeks. Christmas will usher in December, and there is a possibility of further decline in market liquidity. Therefore, oil prices will consolidate the bottom range after hitting the bottom. Oil is supported by the $60-65/barrel line.
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