Crude oil trading reminder: Iran's enriched uranium stocks have risen to weapon level! The EIA monthly report hits, can oil prices regain their upward trend?

During the Asian session on Wednesday (September 8), US crude oil hovered around 68.42. Oil prices fell on Tuesday, dragged down by the strong US dollar and concerns about weak demand in the US and Asia. However, the continued interruption of production in the US Gulf of Mexico limited the decline.



In the day, focus on the vacancies of JOLTs in the United States in July, at 00:00 on Thursday, EIA announced the monthly short-term energy outlook report, 1:10 Fed Williams speech, 2:00 Fed announced the economic status Beige Book, 4:30 announced the United States Changes in API crude oil inventories as of the week of September 3 (the data was originally scheduled to be released at 4:30 on Wednesday, due to the one day postponement of the Labor Day holiday in the United States

Negative factors affecting oil prices

[U.S. stocks have fallen from near historical highs, investors worry that economic recovery has peaked]

The U.S. stock market fell from a level close to a historical high on Tuesday. After returning from a long weekend, traders were caught in concerns that the pace of economic recovery might weaken. The S&P 500 Index and the Dow Jones Industrial Average fell; the rise of heavyweight technology stocks such as Netflix, Amazon and Apple pushed the Nasdaq 100 index higher, but about 7 out of every 10 constituent stocks in the index still fell.

The US employment data released last Friday was significantly weaker than expected, and the stock market was close to a record high, causing the market to generally fall after the three-day holiday. Moreover, there will not be much news on the data side this week to ease investors' worries about the economy in the third quarter.

In addition, concerns about the delta variant of the new crown virus hindering the reopening of the U.S. economy are also putting pressure on certain sectors of the market.

Haris Khurshid, portfolio manager at Fate Capital Management, said, "Worries about the delta mutant strain are dragging down the overall growth in the third quarter." "The next few weeks will be very difficult. Delta strains, weaker fiscal stimulus, Legislative policies and concerns about the overall slowdown in some industries have prompted investors to become more critical."

[The number of confirmed cases of new coronary pneumonia during the Labor Day holiday in the United States has tripled over the same period last year]

According to a report by the US "Capitol Hill" on September 7, local time, compared with Labor Day in 2020, as of the last day of the Labor Day holiday (September 6) in the United States this year, the number of confirmed cases, deaths and hospitalizations of new coronary pneumonia in the United States were all There has been a sharp increase over the same period, and the number of confirmed cases of new coronary pneumonia has increased by 316%. The Washington Post reported that the number of people hospitalized in the United States during Labor Day in 2021 reached 99,270, which is higher than the 38,192 in 2020. Compared with last year, the number of deaths due to confirmed new coronary pneumonia is also twice as high. The total number of confirmed cases of new coronary pneumonia in the United States has surged, with a total of more than 40 million confirmed cases and a total of more than 680,000 deaths.

[The number of newly diagnosed cases of new coronary pneumonia in children in the United States within a week reaches a new high]

According to the weekly report of the American Academy of Pediatrics and Children’s Hospitals Association, the United States reported 251,781 new confirmed cases of childhood new coronary pneumonia in the week ending September 2, which was the week with the largest number of child infections. The American Academy of Pediatrics and Children’s Hospital Association also stated that there is an urgent need to collect more data on the impact of the new crown virus on children, including whether the new crown virus will cause long-term emotional, mental or physical health effects on infected children.

Mobius Risk Group's vice president of crude oil market John Saucer said that the strengthening of the U.S. dollar and Saudi Arabia’s move to lower the official price (OSP) in October on Sunday put pressure on crude oil. A strong dollar makes oil more expensive for holders of other currencies.

Tetsu Emori, CEO of Emori Fund Management Company, said that oil prices have fallen as investors adjust their positions. Demand in Asia and the United States has slowed, and market sentiment remains weak. For U.S. crude oil futures prices to rise above $70, some new positive news is needed, such as signs that the epidemic has subsided, or signs of rising demand for aviation fuel.

[There have been cases of Delta virus infection in 174 countries and regions]

On the 7th local time, the WHO released the weekly epidemiological report of new coronary pneumonia. Last week (August 30 to September 5), there were more than 4.47 million new confirmed cases of new coronary pneumonia worldwide, except for the number of new cases in the Americas. Increased, and the number of new cases in other regions decreased. There were nearly 68,000 new deaths, which was similar to the previous week.



The Americas and European regions saw a significant increase in new deaths last week, while new deaths in other regions all declined. The five countries that reported the most cases last week were the United States, India, the United Kingdom, Iran, and Brazil. So far, 174 countries and regions have been infected with the Delta strain.

Bullish factors affecting oil prices

[Iran's enriched uranium inventory has increased significantly]

The new Iranian government continues to substantially increase nuclear fuel production and has not resumed full cooperation with the International Atomic Energy Agency (IAEA) observers. This move shows that the international community is expected to become more tense when discussing the Iranian nuclear issue this month.

IAEA inspectors reported on Tuesday that Iran’s enriched uranium stocks have risen to near weapons-grade levels and production capacity has also expanded. In addition, Iran continues to restrict the IAEA's surveillance of its nuclear facilities and investigations into allegedly undeclared nuclear activities.

This is the first report issued by the IAEA since the Iranian hardliner Leahy took office last month. The IAEA wrote in a 16-page restricted document seen by Bloomberg, “Iran’s failure to respond to the IAEA’s request for authorized surveillance equipment has seriously damaged IAEA’s technical capabilities,” the second part 7 The report on page reiterated the IAEA’s serious concerns about Iran’s nuclear materials placed in undeclared locations.

The above report may put pressure on the IAEA representatives of various countries who met in Vienna on September 13, and the UN Security Council may formally condemn Iran’s nuclear activities and its refusal to cooperate with observers.

Iranian officials have previously warned that if this is the result, it will be detrimental to the prospects for negotiations on the Iranian nuclear agreement. Negotiations on the Iranian nuclear agreement held in Vienna were suspended earlier this year when Iran was preparing to elect a new president, and it has not yet resumed.

Some analysts and diplomats predict that Leahy will try to use the country’s nuclear technology advances to get Washington to relax its broader sanctions. If an agreement is reached, it may trigger a surge in Iranian oil exports and ease tensions in the Gulf region.

[79% of production capacity is still interrupted in the U.S. Gulf of Mexico]

China's strong economic indicators and Hurricane Ida have continued to disrupt supplies to the United States, which have brought some support to oil prices.

According to Chinese customs data, China's crude oil imports in August increased by 8% from the previous month, and the unexpected acceleration of China's export growth that month gave a boost to the economy.

According to data from the US Bureau of Security and Environmental Enforcement (BSEE), the Gulf of Mexico region shut down 79.33% of crude oil production (or 1.44 million barrels per day) and 77.89% of natural gas production (or 1736.76 million cubic feet per day). After Hurricane Ada, a total of 79 oil and natural gas production platforms were still evacuated. According to energy analysts, Ada may reduce total US production by as much as 30 million barrels this year.

Royal Dutch Shell (RDSa.L) said it continues to assess the damage to its WestDelta-143 offshore platform, which transfers about 200,000 barrels of oil and gas from three offshore oil fields a day.

[OPEC+ hopes to keep oil prices in the range of US$65-75 per barrel]

Vagit Alekperov, CEO of Lukoil, Russia’s second-largest oil producer, said oil prices of US$65-75 are “appropriate” for consumers. The Organization of Petroleum Exporting Countries and its allies (OPEC+) are working hard to control production. Maintain this price range.

In an interview with Kommersant published on Tuesday, Alekperov stated that the suppression of oil production will depend on market conditions, and (production) regulation can vary depending on the situation. For now, September 2022 will be A milestone, when the restrictive measures will be gradually lifted. The company has as many as 90,000 barrels of idle output every day, and we hope this will be needed by the market. "



On the whole, China’s optimistic crude oil import data and the interruption of crude oil production caused by the hurricane are good for oil prices. However, as the US dollar strengthens and the pandemic has triggered a renewed concern about demand, oil prices are more inclined to fall slightly. Short-term oil prices pay attention to the EIA monthly report and Iraq. News about nuclear negotiations.

GMT+8 08:08, US crude oil is now quoted at US$68.42/barrel.