U.S. crude oil inventories have dropped the most since September, and a weak U.S. dollar has boosted the appeal of commodities. As of early morning today, WTI January crude oil futures closed up $1.51, or 2.13%, at $72.38 per barrel. Brent crude oil futures for February closed up $1.14, or 1.54%, at $75.02 per barrel. LME copper futures closed up nearly 3%, LME aluminum futures rose 3.2%, LME zinc futures rose more than 5%, and LME nickel futures rose 2.75%. Domestic futures closed at night, with black futures closing higher across the board. Thermal coal rose 5.03%, iron ore rose 4.14%, coking coal rose 3.86%, coke rose 2%, rebar rose 1.25%, and hot-rolled coil rose 1.12%. International copper closed up 2.23% in night trading, Shanghai copper closed up 1.85%, Shanghai aluminum closed up 2.39%, Shanghai zinc closed up 3.41%, Shanghai lead closed up 2.15%, Shanghai nickel closed up 2.11%, and Shanghai tin closed up 1.72% . Stainless steel closed up 0.80% in night trading.
A weaker U.S. dollar helped strengthen gold and silver prices. As of the close early this morning, the February 2022 gold futures price, the most actively traded gold futures market on the New York Mercantile Exchange, rose 1.91% to close at $1,798.2 per ounce. The price of silver futures for delivery in March 2022 rose 4.36% to close at US$22.485 per ounce; the price of platinum futures for delivery in January 2022 rose by 3.88% to close at US$928.9 per ounce.
Joe Perry said that gold prices first fell yesterday, but then started to rise again after the FOMC meeting. Many gold bulls may stop losses before the meeting and then re-enter the market. In his opinion, the price of gold will continue to rise. After all, there has been such a big wave of selling before. The price may not rise back to the previous high, but the price will always fluctuate, from the highest point to the lowest point, and every subsequent time it will rise again. It may be difficult to break through the previous high when it rushes higher, and it will not break through the previous low when it falls back. It is likely to eventually stabilize at the average level in the middle area (near $1,834 per ounce is still a resistance level that needs to be broken).
“The Fed has accelerated its pace of tapering its asset purchase program and laid out a roadmap for a series of interest rate hikes in the next few years, starting with three interest rate hikes in 2022. Powell also mentioned that the Fed will soon begin to shrink its massive balance sheet from The possibility of withdrawing liquidity from the financial system. If only liquidity factors are considered, it is obvious that the macroeconomic momentum that continues to push up oil prices is fading. However, the Federal Reserve also emphasized the optimistic expectations of the economy and hinted that investors believe it can gradually improve Interest rates can be used to control rapid price increases without causing substantial damage to GDP and achieving a soft landing for the economy, which has led to a recent rebound in market risk appetite and boosted oil prices.” said Yang An, head of Haitong Futures Energy and Chemical R&D Center.
In the view of Yu Pengsen, a researcher at Zhaojin Futures, the Fed meeting can be interpreted as a negative impact, and the market basically reacted in this way. After the negative impact of oil prices, the fundamentals did not change significantly, and the trend of the US dollar is currently negative. The impact of crude oil is relatively weak. However, after the negative news materializes, oil prices must react, but the market has not yet reflected it, but this reaction may appear in the near future.
However, Joe Perry believes that international oil prices will experience abnormal fluctuations next year. “OPEC said that crude oil may be oversupplied early next year, and OMIC may put pressure on Europe and demand will slow down. For example, the United States, the United Kingdom, South Korea and other countries will release strategic crude oil reserves. However, it should be noted that OMIC Sooner or later, Chron and COVID-19 will disappear, demand will return, and the above-mentioned countries also need to replenish their strategic reserves.” He believes that oil prices will fluctuate in a wide range of 60-100 US dollars per barrel in 2022, and prices may fall at the beginning of the year , but it will rebound in the future, especially after the first quarter, the economy continues to recover, and oil prices will still rebound even against the backdrop of rising interest rates.
In addition, some agencies say that most of the world’s oil and natural gas reserves are facing threats from rising tides, storms, floods and extreme temperatures caused by climate change. Among them, the U.S. oil industry faces the challenge of climate change. Extreme cold weather hits the major oil, natural gas and refining centers on the U.S. Gulf Coast, leading to long-term shutdowns and production cuts.
“In March this year, extreme cold weather hit Texas, causing widespread power outages, which affected crude oil production. Hurricane Ida swept across the Gulf of Mexico at the end of September, causing a loss of more than 30 million barrels of crude oil in the U.S. Gulf, which directly affected the crude oil market in the following months. The stability of supply has pushed up oil prices. The recent occurrence of extremely destructive tornadoes in Kentucky and other places in the United States shows that the current global extreme weather has an increasing impact on people’s production activities. This is indeed something that needs attention, especially Crude oil production and refining facilities in the U.S. Gulf region are basically not designed to deal with extremely cold weather. Once a devastating weather disaster occurs again, it will still have an impact on crude oil production and supply.” Yang An said.
In Yu Pengsen’s view, the current low-temperature weather and natural disasters have a weak impact on crude oil, mainly in the relatively off-season period of winter, while major oil-producing countries are increasing production. There is no shortage of crude oil in the market, and inventories in some areas are still there. Increased. The early expected cold winter has not materialized, and the market has calmed down from speculation about weather and natural disasters. Furthermore, current oil prices already reflect this expectation.
According to Huishang Futures analyst Liu Jiao, the current recovery after the epidemic is still the main line of crude oil trends. The increase in crude oil production is slower than demand, and the general direction is bullish, but there will also be corrections caused by periodic negative market conditions.
“The current EIA inventory level is at a low level over the same period. With crude oil inventories low, prices will be more sensitive to destocking dynamics. The current supply-side rhythm of the market is relatively stable. Against this background, demand dynamics will be the most important factor affecting inventory or accumulation. Factors. On the one hand, it is the uncertainty brought to the market by the impact of the staged epidemic, and on the other hand, it is the uncertainty of interest rate hikes. The market’s downward risks will mainly come from the uncertainty of the epidemic and the progress of the Iran nuclear agreement. In addition, it is necessary to Pay attention to the dynamics of OPEC+ production cuts. There is still some resistance to the rebound of crude oil.” Liu Jiao said.
Yu Pengsen said that from the current fundamentals of crude oil, there are several main changes. First, the U.S. production has begun to increase at an accelerated pace. The increase in the number of active drilling rigs in the early stage has reflected in the near future, and this production will be maintained for some time. The increase may last until around March. Second, oil consumption in the United States is relatively strong in winter. The overall crude oil demand has exceeded the same period last year. The demand for jet fuel has increased, and heating oil has also increased significantly. There has been no obvious weakening in gasoline, indicating that the demand side is still improving and demand is good. Third, OPEC has not interfered too much with oil prices. The outlook released is negative in the short term and optimistic in the medium and long term. This is somewhat different from the EIA.
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