Affected by Saudi Arabia’s denial of the news of “OPEC+” production increase, international oil prices rebounded from the plunge!
Saudi Arabia says the “OPEC+” oil production cut plan will last until the end of 2023
According to CCTV News, on the evening of the 21st local time, Saudi Energy Minister Abdulaziz bin Salman denied to the outside world recent news that Saudi Arabia is discussing increasing oil production with other oil-producing countries.
The Saudi National News Agency quoted the Saudi Energy Minister as saying that “OPEC+” will not “discuss any issues related to oil production” before its regular meeting, and that “OPEC+” plans to reduce daily production by 2 million barrels will continue until 2023. End of year.
Previously, the Saudi-led Organization of the Petroleum Exporting Countries and non-OPEC oil-producing countries such as Russia agreed on October 5 to implement a 2 million barrels per day oil production cut starting in November.
On Monday, international oil prices first declined and then rose, showing a deep V rebound trend. They once plummeted 6% during the session and closed only slightly lower. As of the close of the day, the December contract of WTI crude oil futures fell by US$0.35/barrel to close at US$79.73/barrel, a decrease of 0.44%; the January contract of Brent crude oil futures fell by US$0.17/barrel and closed at US$87.45/barrel, a decrease of 0.44%. is 0.19%.
Crude oil prices are only “one step away” from new lows this year
Since November, crude oil prices have continued to fall rapidly after rising high. Domestic crude oil futures hit a nine-month low, fully giving up the gains since the outbreak of the Russia-Ukraine conflict in February this year, while international oil prices are only “a short distance away from hitting a new low for the year.” a step far”. What is the reason for the recent sharp decline in oil prices that were previously strong? Will crude oil prices continue to fall in the future? A reporter from Futures Daily interviewed many industry insiders to analyze the main thread behind the recent changes in crude oil prices.
Regarding the recent high-level decline in domestic and foreign oil prices, Li Jie, an analyst at CCB Futures, attributes this to three major factors: First, the recent tough external stance of the Federal Reserve, and the market is significantly worried that the Federal Reserve will continue to raise interest rates by 75 basis points in December. The second reason is that the market has speculated on the rapid recovery of my country’s crude oil demand in advance, but it will take time for my country’s substantial demand to recover. The third reason is that the OPEC+ crude oil monthly report has significantly lowered the expectations of global crude oil demand in the fourth quarter, and the market is dominated by concerns about crude oil demand. Oil prices weakened.
Chen Tong, an analyst at Yide Futures, told reporters that the recent sharp decline in international oil prices was mainly due to the hawkish remarks of Federal Reserve officials and the rebound of the U.S. dollar index, which put pressure on commodity prices including crude oil. The market is also concerned about the rebound of the epidemic in some Asian countries. Concerns also weighed on the demand outlook.
“As November comes to an end and December approaches, the focus of the future crude oil market will be on the implementation of the EU’s sanctions on Russian oil exports.” Chen Tong said that according to the Russian Energy Development Center, it is expected to be similar to the average level from June to October. Compared with this, Russian crude oil production will decrease by 1.5 million to 1.7 million barrels per day in December, a decrease of 14%. Considering that the average transaction price of Russian Ural oil is less than 70 US dollars per barrel, if the upper limit of Russian oil prices set by the United States and Europe exceeds 60 US dollars per barrel, the effect of sanctions may be limited, and the final results of Russian oil export sanctions have not been effectively implemented. , the further downward space for international oil prices will be relatively limited.
“The main impact of EU sanctions on Russian oil is expected to be reflected in the first quarter of 2023.” Li Jie said that during the recent decline in oil prices, the futures structure has also weakened simultaneously, and the market sentiment is pessimistic. It is expected that short-term oil prices will oscillate weakly. Lord, we also need to pay attention to the implementation of sanctions against Russia.
“The core logic of current crude oil market transactions is that global economic fundamentals and the margin of crude oil supply and demand are weakening.” CITIC Futures analyst Zhu Ziyue said that from the supply side, although the EU’s import ban on Russian seaborne crude oil is about to take effect, the EU is currently There are only 700,000 barrels of imported seaborne Russian crude oil left per day. A large amount of Russian crude oil is being transferred to India and Turkey. The seaborne export volume of Russian crude oil is even higher than before the outbreak of the Russia-Ukraine conflict. At the same time, the momentum for U.S. crude oil production growth has shown marginal improvement recently, with production rising to 12.1 million barrels per day. This, coupled with U.S. oil companies’ actions to dump warehouses and reduce taxes at the end of the year, has increased pressure on the crude oil supply side.
From the perspective of crude oil demand, Zhu Ziyue said that the overall warm weather in Europe and North America during this year’s heating season has led to weak heating demand. Considering that natural gas prices in Europe and the United States have fallen sharply from their highs, the hype effect of oil and gas substitution that was once prevalent in the market has weakened. At the same time, from China’s perspective, the optimization of epidemic prevention policies has boosted market confidence, but the actual recovery of global crude oil demand is difficult to achieve overnight, and may even face shrinkage.
OPEC’s latest monthly report shows that due to increasingly severe economic challenges such as high inflation and interest rate increases, global oil demand growth is expected to be 2.55 million barrels per day in 2022, 100,000 barrels per day less than the previous forecast. It is understood that this is the fifth time OPEC has lowered its demand forecast in the past six months. OPEC also lowered its forecast for global crude oil demand growth in 2023.
Fan Chunhua, an analyst at Guosen Futures, said that since the second half of the year, the global crude oil market has gradually completed the transformation from insufficient supply to oversupply. At present, Russian crude oil production continues to hit new highs. In order to maintain��With frontline expenses and maintaining crude oil market share, the possibility of Russia taking the initiative to significantly reduce crude oil production in the future is also very low. The imposition of import price restrictions on Russian crude oil by Europe and the United States may lead to further lower Russian crude oil export prices to India and Asia. Need Be wary of the possible impact of a price war among the world’s major oil-producing countries.
“Looking ahead to the market outlook, the likelihood of the short-term conflict escalating between Russia and Ukraine is reduced, which partially weakens the disruption of the crude oil supply chain caused by geopolitical factors. At the same time, European natural gas inventories are currently at a high level, and the possibility of an energy crisis in Europe this winter is also small.” Fan Chunhua said. , considering that the signs of economic recession in Europe and the United States are becoming more and more clear, which may lead to a sharp decline in global demand for crude oil. The crude oil market is mainly driven by the expectation of a global economic recession. It is expected that oil prices may maintain a short-term weak pattern in the future.
“If overseas economies fall into recession next year, oil prices will correct, and the lower support is expected to be around US$70/barrel. If the European and American economies achieve a soft landing, combined with the optimization of my country’s economic recovery and epidemic prevention policies, oil prices may oscillate at a high level next year. For the Lord.” Zhu Ziyue finally said.