In electronic trading on August 11 (Wednesday), crude oil futures prices experienced significant fluctuations in the United States’ attitude towards OPEC+ crude oil production. Earlier that day, the White House stated in a statement that Biden had urged OPEC and its partner countries to increase production, and clearly stated that the production increase roadmap previously agreed by OPEC+ was “far from sufficient.” This news caused international oil prices to fall in a short period of time. 2.7%.
However, the White House later stated that OPEC+ aims to establish long-term efforts to end anti-competitive practices. The U.S. government and OPEC+ are communicating, but they are focusing on long-term cooperation and are not requiring these countries to take immediate action. Crude oil prices turned from falling to rising after hearing this, and the overall increase finally reached 4.1%.
The reason why the United States expressed support for OPEC+ to increase crude oil production also has its substantive significance. U.S. President Biden said during the day that the current gasoline price It is already “expensive enough” and stressed that it has “made it clear” to OPEC that it needs to reverse the production capacity reduced during the epidemic. Biden said he hopes to remove all factors that hinder the decline of oil prices so that consumers can buy gasoline at lower prices, but Biden did not make specific comments on how quickly OPEC+ should reverse production cuts.
According to EIA data, as of the week of August 6, the retail price of gasoline in the United States was US$3.269/gallon, which has increased by 40.9% compared with the beginning of this year; Compared with last year when the epidemic broke out, it increased by 74.8%. The surge in gasoline prices has put pressure on the U.S. government and people who rely on gasoline as their main consumption fuel. Therefore, the United States hopes to call on OPEC+ to increase crude oil production in order to reduce the cost of gasoline for U.S. consumers.
In July this year, OPEC+ agreed to increase crude oil production by 400,000 barrels per day per month, but its output is well below pre-pandemic levels. OPEC reduced production by 10 million barrels per day in 2020 due to Demand has fallen sharply, and the United States has cut crude oil production. EIA monthly report data shows that the daily crude oil output of the 13 OPEC member countries in July was 26.71 million barrels, an increase of 670,000 barrels compared with the daily crude oil production in June. Among them, the daily crude oil production of Saudi Arabia was 9.45 million barrels, an increase of 500,000 barrels daily compared with the June average.
In this regard, the Commonwealth Bank of Australia believes that as OECD commercial crude oil inventories have fallen back to pre-epidemic levels, the tightening oil market outlook may amplify the rise in oil prices. Goldman Sachs expressed concern about the global impact of the next wave of the COVID-19 epidemic. It believes that the current oil market is still in a state of sluggish demand, but there is more and more evidence of positive structural supply, and the marginal cost of supply has also seen structural changes. And maintains the expectation that Brent oil prices will reach US$80 per barrel in the fourth quarter of this year.
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