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San03b644@90100·Jul 11

After rising for two weeks in a row, international oil prices are starting to rebound?

Due to intertwined long-short factors, international oil prices have fluctuated repeatedly since the beginning of this year.

On the one hand, major central banks such as the Federal Reserve have made slow progress in curbing core inflation, and their further interest rate hikes may drag down global economic growth, which in turn will affect the demand for fossil fuels. On the other hand, major oil-producing countries represented by Saudi Arabia have made frequent moves to promote the rebalancing of the crude oil market.

On July 3 local time, Saudi Arabia, Russia and Algeria successively announced that they will further cut crude oil supply next month to maintain the stability of the international crude oil market. The cuts, when implemented, bring the total cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, the "OPEC+" coalition, to about 5 million barrels per day, or about 5 percent of global oil demand. Saudi Arabia then raised prices across the board for its August crude oil sales to Asia, the U.S. and Europe, signaling the kingdom's optimism about demand growth.

Affected by supply concerns, international oil prices rebounded significantly last week, with Brent crude oil futures hitting the highest closing level since May 1 and U.S. crude oil futures hitting the highest closing level since May 24. Both benchmarks were up about 5% for the week, their second straight weekly gain.

“Given the U.S. heading into peak summer travel and Saudi Arabia’s audacity to raise prices in Europe and Asia, the outlook for crude oil demand is brightening. Oil has bottomed out and prices could continue to move higher as long as global recession fears don’t magnify significantly. " OANDA analyst Edward Moya (Edward Moya) commented.

But in the eyes of others, in the context of disagreements among members of the Organization of the Petroleum Exporting Countries, the oil supply side may once again tilt the "balance" in favor of the bears. Natasha Kaneva, head of commodity research at JPMorgan Chase, told CBN reporters, "Although the oil market has finally begun to show signs of (supply and demand) tightening, to regain control of the market this year, we estimate that In addition to the production cuts already announced, OPEC+ will need to cut production by an additional 700,000 barrels per day in the second half of the year; and in order to offset the increase in non-OPEC supply and the output growth of some non-core OPEC members, the new 700,000 barrels of cuts need to be extended to 2024."

Post by @90100.lens
  • sa
    San03b644@90100·Jul 11

    There are many variables on the supply side

    Oil prices have lost about a fifth of their value since late last year on expectations of a slowing global economy and the possibility that the global oil market will remain in surplus. In view of this, on June 11 local time, Goldman Sachs significantly lowered its oil price forecast. Goldman Sachs was one of the most steadfast bulls on oil prices earlier this year, when it predicted international oil prices would rise to $100 a barrel by the end of the year. Larger-than-expected supplies from Russia, Iran and Venezuela were a key factor in lowering the outlook for oil prices, Jeff Curie, the bank's global head of commodities research, said in a note.

    Kaneva and her team estimate that after the implementation of the voluntary production cut measures of about 1.1 million barrels per day, which came into effect in May, the average daily oil supply of "OPEC+" in the first six months of this year was still 17.5% higher than that of the same period last year. million barrels to 44.6 million barrels.

    It remains to be seen how far members concerned will abide by the agreements, as the production cut pledges agreed in April are not mandatory.

    On July 6, local time, Iraqi Oil Minister Hayan Abdul Ghani said in an interview with foreign media that Iraq is considering increasing its current oil production capacity of 5.4 million barrels per day. "Iraq wants to pass a promising plan to increase production capacity to 6 million barrels per day by signing licensing contracts with companies in the next stage." He said at an OPEC seminar held in Vienna that day.

    In addition, higher output from some member states that have not participated in voluntary production cuts will also offset the positive impact of a series of production cuts on oil prices.

    According to commodity data providers Kpler and Petro-Logistics, Iran exported an average of about 1.6 million barrels a day of oil in May and June this year, more than double the amount exported about a year ago and the highest since 2018. the highest level. In 2018, the United States reinstated sanctions on Iran, resulting in a sharp drop in the latter's oil exports.

    demand is elastic

    But on the other hand, despite the continued economic slowdown in major economies, global market demand remains resilient. On July 7 local time, foreign media quoted sources close to OPEC as saying that when the organization releases its first outlook later this month, it may maintain an optimistic view of oil demand growth next year, which is expected to slow down this year. slowed, but still above average.

    The move came after the U.S. Energy Information Administration said the previous day that U.S. crude inventories fell more than expected due to strong refining demand, while gasoline inventories fell sharply after driving increased last week.

    In addition, energy services company Baker Hughes said U.S. energy companies increased the number of active oil and natural gas rigs last week for the first time in 10 weeks, and the number of natural gas rigs hit the largest weekly increase since October 2016.

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