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Market News Crude oil trading reminder: Libya's production cuts lead to further tightening of supply, investment banks are optimistic about oil prices rising by another $20
Crude oil trading reminder: Libya's production cuts lead to further tightening of supply, investment banks are optimistic about oil prices rising by another $20
In the Asian session on June 14, U.S. oil is now at $120.65 per barrel; oil prices rose in shock on Monday, and Libya cut production, which further tightened the supply in the global oil market. The tight supply has overshadowed concerns that demand will be under pressure, and oil prices are short-term. It may rise in shock at the 120 mark, and pay attention to the OPEC monthly report during the day.
2022-06-14
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During the Asian session on Tuesday (June 14), U.S. oil fell slightly in shock and is now at $120.65 per barrel; oil prices rose in shock on Monday, and Libya cut production, which further tightened the supply in the global oil market. stressful concerns.
During the day, we will focus on the OPEC monthly report and the annual U.S. PPI rate in May, and the API data will be released at 4:30 on Wednesday.
[Libya lost 1 million barrels per day of production]
Libya's oil minister said earlier that the country's oil production averaged 1.2 million barrels a day last year and has now cut about 1.1 million barrels. This shows that Libya's oil production is only about 100,000 barrels per day. This will further tighten supply in the global oil market.
In eastern Libya, almost all oil and gas production has been shut down, the Libyan oil minister said. Currently, the only field in continuous production is the 40,000-bpd Wafa field in southwestern Libya, after protests forced the closure of Es Sider and Ras Lanuf, the country's largest and third-largest oil ports in the northeast. Workers at Libya's second-largest oil port have also been urged to suspend work after the 125,000-bpd Sarir field was completely shut down, according to two people familiar with the matter. Together, the three oil ports handle about 70 percent of Libya's total output.
Despite the country's exclusion from OPEC's quota system, a sharp drop in its oil supply has exacerbated OPEC's weak performance as the world's main source of oil supply, making it difficult for consumers to take respite from surging energy costs this summer Opportunity.
'We've already been overwhelmed by the reduction in Russian oil supplies, and now add an exclamation point - the situation in Libya,' said Robert Yawger, executive director of energy futures at Mizuho Bank.
Oil traders expect Russia’s supply to only maintain its current level of around 10 million barrels per day, a level that has fallen by about 10 percent since the conflict between Russia and Ukraine. But many believe supply could fall by another 1 million barrels, or even 1.5 million barrels.
[Russia claims to have destroyed a large number of weapons and equipment shipped from the west to Ukraine]
The Russian Ministry of Defense said on the 13th that the Russian army has attacked a large number of weapons and equipment sent to Ukraine by the United States and European countries. The Russian army also attacked a temporary deployment point of foreign mercenaries in the Luhansk region. Russian Defense Ministry spokesman Konashenkov said on the 13th that the Russian military used high-precision air-based missiles in the Donetsk region to blow up a large number of weapons and equipment delivered to Ukraine by the United States and European countries. A temporary deployment point for foreign mercenaries in the Luhansk region.
[Goldman Sachs says oil prices can rise another $20]
U.S. gasoline prices are likely to soar this summer as a supply shortage could create a shock similar to that seen in 2008 and the 1970s, Goldman Sachs energy research director and senior commodity strategist Damien Courvalin said on Monday.
Courvalin said the "upside gap" in gas prices was a "major risk that must be kept in mind". That's because supply is still "too low," he believes, while "the momentum in demand is actually quite resilient, and all we're seeing is demand is still higher than supply and inventories continue to fall."
Courvalin believes hurricane season could bring the risk of a supply shock during the summer. He also believes that "a small problem at the refinery" could have a huge impact on prices at the gas station.
When asked where U.S. gasoline prices will peak, Courvalin said current estimates "will be below $6, but still higher than they are today."
Kurvarin added that the price of Brent crude could be $20 higher than its current price. Currently, Brent crude futures are trading around $120, while WTI is hovering below $119.
Courvalin noted that oil prices won't start to pull back until they're high enough to trigger "demand destruction." Given the strength of the dollar, Courvalin said, "demand destruction" is likely to start in Europe rather than the United States.
[Thailand is expected to soon declare the new crown as an endemic epidemic earlier than originally planned]
Thailand's Ministry of Public Health said on the 12th that the new crown epidemic in Thailand is coming to an end due to the cooperation between various departments, especially the public, according to Thailand's "Nation Daily".
Thailand has entered the late stage of the new crown epidemic, and it is expected that the disease will be declared an endemic epidemic soon, said Deputy Minister of Health Jedeep of Thailand. Thailand's Ministry of Health initially planned to declare Covid-19 an endemic on July 1, but now expects to announce it more than two weeks earlier.
[The S&P 500 fell nearly 4% to confirm that it is in a bear market, and recession fears intensify]
U.S. stocks tumbled on Monday, with the S&P 500 confirming a bear market, fueling fears that an expected aggressive rate hike by the Federal Reserve could push the economy into a recession.
The benchmark S&P 500 has fallen for four straight days, its longest losing streak in three months, and is now down 21.8% from its most recent record closing high by commonly used definitions, confirmed on Jan. 3. It has been in a bear market since.
Major S&P sectors ended sharply lower, with only five sectors higher. Markets have been under pressure this year as rising prices, including a jump in oil prices caused by the war in Ukraine, have prompted the Federal Reserve to take strong action to tighten monetary policy, such as raising interest rates.
The Fed will release its latest policy decision on Thursday at GMT+8, and investors will be keenly watching for any clues about how aggressive the Fed will be. Growth giants such as Apple, Microsoft and Amazon were the biggest drags on the S&P 500. The yield on the benchmark 10-year Treasury note hit 3.44 percent, the highest since April 2011. Growth stocks are more likely to see their earnings suffer in an environment of rising interest rates.
Ross Mayfield, an investment strategist at Baird, said the market had been trying to rally around the idea that inflation had peaked and the Fed would not have to raise rates more aggressively, a theme that was shattered by last Friday's CPI report, which showed broad-based inflation across sectors. ingrained. "
According to data from S&P Dow Jones Indices Ltd., the longest bear market in the S&P 500 lasted more than five years, starting on March 6, 1937 and ending on April 29, 1942, while the shortest bear market only lasted For more than a month, it started on February 19, 2020 and ended on March 23. During a bear market, it takes the S&P a little more than a year on average to bottom and then about two years to recover to its previous high, according to CFRA Research.
In addition, the U.S. two-year and 10-year yield curves briefly inverted for the first time since April, in what many in the market see as a credible signal that a recession is likely in the next year or two. The Nasdaq, which has closed lower for four straight days, was confirmed in bear market territory on March 7 and has fallen about 30% this year.
The CBOE Market Volatility Index, known as Wall Street's fear gauge, earlier surged to 35.05, its highest since May 9, before closing at 34.02. Still, many analysts see the level as low and could mean more selling pressure to come.
Rob Haworth, senior investment strategist at Bank of America Wealth Management, said: "The market was not down as much as it seemed to be disappointed. While there was a sell-off in some stocks, it wasn't deep enough, not violent enough, to show that people were liquidating their positions."
[Russia replaces Saudi Arabia as India's second largest oil supplier]
Russia overtook Saudi Arabia as India's second-biggest oil supplier in May, after Iraq remained the top spot, trade data showed. Indian refiners imported about 819,000 bpd of oil from Russia in May, their highest level so far, from about 277,000 bpd in April. In May of this year, Russian oil accounted for about 16.5% of India's total oil imports. As a result, India's oil imports from Russia and Central Asian countries increased to about 20.5%, while the proportion of oil imports from the Middle East fell to about 59.5%. African oil's share of India's crude imports surged to 11.5% last month from 5.9% in April. India's oil imports in May were 4.98 million barrels per day, the highest since December 2020. The import volume increased by about 5.6% month-on-month and about 19% year-on-year.
[Lebanon reported 174 cases of acute jaundice hepatitis A]
On June 13, local time, the Lebanese Ministry of Public Health notified that 174 cases of acute jaundice hepatitis A had occurred in the country. The Ministry of Health of Lebanon said that samples were being collected to identify the source of infection, and that data on new cases would be released daily in the future.
[Venezuela finds first suspected monkeypox case]
On the 12th local time, the Venezuelan Ministry of Health announced that the country's first suspected case of monkeypox was found at the capital Caracas International Airport.
In general, the geopolitical situation remains tense, Libya’s production cuts have further tightened supply, and some countries have relaxed epidemic restrictions. Oil prices may fluctuate and rise at the 120 mark in the short term. Pay attention to OPEC’s monthly report within days.
At 7:51 GMT+8, U.S. crude oil is now at $120.65 a barrel.
During the day, we will focus on the OPEC monthly report and the annual U.S. PPI rate in May, and the API data will be released at 4:30 on Wednesday.
Bullish factors affecting oil prices
[Libya lost 1 million barrels per day of production]
Libya's oil minister said earlier that the country's oil production averaged 1.2 million barrels a day last year and has now cut about 1.1 million barrels. This shows that Libya's oil production is only about 100,000 barrels per day. This will further tighten supply in the global oil market.
In eastern Libya, almost all oil and gas production has been shut down, the Libyan oil minister said. Currently, the only field in continuous production is the 40,000-bpd Wafa field in southwestern Libya, after protests forced the closure of Es Sider and Ras Lanuf, the country's largest and third-largest oil ports in the northeast. Workers at Libya's second-largest oil port have also been urged to suspend work after the 125,000-bpd Sarir field was completely shut down, according to two people familiar with the matter. Together, the three oil ports handle about 70 percent of Libya's total output.
Despite the country's exclusion from OPEC's quota system, a sharp drop in its oil supply has exacerbated OPEC's weak performance as the world's main source of oil supply, making it difficult for consumers to take respite from surging energy costs this summer Opportunity.
'We've already been overwhelmed by the reduction in Russian oil supplies, and now add an exclamation point - the situation in Libya,' said Robert Yawger, executive director of energy futures at Mizuho Bank.
Oil traders expect Russia’s supply to only maintain its current level of around 10 million barrels per day, a level that has fallen by about 10 percent since the conflict between Russia and Ukraine. But many believe supply could fall by another 1 million barrels, or even 1.5 million barrels.
[Russia claims to have destroyed a large number of weapons and equipment shipped from the west to Ukraine]
The Russian Ministry of Defense said on the 13th that the Russian army has attacked a large number of weapons and equipment sent to Ukraine by the United States and European countries. The Russian army also attacked a temporary deployment point of foreign mercenaries in the Luhansk region. Russian Defense Ministry spokesman Konashenkov said on the 13th that the Russian military used high-precision air-based missiles in the Donetsk region to blow up a large number of weapons and equipment delivered to Ukraine by the United States and European countries. A temporary deployment point for foreign mercenaries in the Luhansk region.
[Goldman Sachs says oil prices can rise another $20]
U.S. gasoline prices are likely to soar this summer as a supply shortage could create a shock similar to that seen in 2008 and the 1970s, Goldman Sachs energy research director and senior commodity strategist Damien Courvalin said on Monday.
Courvalin said the "upside gap" in gas prices was a "major risk that must be kept in mind". That's because supply is still "too low," he believes, while "the momentum in demand is actually quite resilient, and all we're seeing is demand is still higher than supply and inventories continue to fall."
Courvalin believes hurricane season could bring the risk of a supply shock during the summer. He also believes that "a small problem at the refinery" could have a huge impact on prices at the gas station.
When asked where U.S. gasoline prices will peak, Courvalin said current estimates "will be below $6, but still higher than they are today."
Kurvarin added that the price of Brent crude could be $20 higher than its current price. Currently, Brent crude futures are trading around $120, while WTI is hovering below $119.
Courvalin noted that oil prices won't start to pull back until they're high enough to trigger "demand destruction." Given the strength of the dollar, Courvalin said, "demand destruction" is likely to start in Europe rather than the United States.
[Thailand is expected to soon declare the new crown as an endemic epidemic earlier than originally planned]
Thailand's Ministry of Public Health said on the 12th that the new crown epidemic in Thailand is coming to an end due to the cooperation between various departments, especially the public, according to Thailand's "Nation Daily".
Thailand has entered the late stage of the new crown epidemic, and it is expected that the disease will be declared an endemic epidemic soon, said Deputy Minister of Health Jedeep of Thailand. Thailand's Ministry of Health initially planned to declare Covid-19 an endemic on July 1, but now expects to announce it more than two weeks earlier.
Negative factors affecting oil prices
[The S&P 500 fell nearly 4% to confirm that it is in a bear market, and recession fears intensify]
U.S. stocks tumbled on Monday, with the S&P 500 confirming a bear market, fueling fears that an expected aggressive rate hike by the Federal Reserve could push the economy into a recession.
The benchmark S&P 500 has fallen for four straight days, its longest losing streak in three months, and is now down 21.8% from its most recent record closing high by commonly used definitions, confirmed on Jan. 3. It has been in a bear market since.
Major S&P sectors ended sharply lower, with only five sectors higher. Markets have been under pressure this year as rising prices, including a jump in oil prices caused by the war in Ukraine, have prompted the Federal Reserve to take strong action to tighten monetary policy, such as raising interest rates.
The Fed will release its latest policy decision on Thursday at GMT+8, and investors will be keenly watching for any clues about how aggressive the Fed will be. Growth giants such as Apple, Microsoft and Amazon were the biggest drags on the S&P 500. The yield on the benchmark 10-year Treasury note hit 3.44 percent, the highest since April 2011. Growth stocks are more likely to see their earnings suffer in an environment of rising interest rates.
Ross Mayfield, an investment strategist at Baird, said the market had been trying to rally around the idea that inflation had peaked and the Fed would not have to raise rates more aggressively, a theme that was shattered by last Friday's CPI report, which showed broad-based inflation across sectors. ingrained. "
According to data from S&P Dow Jones Indices Ltd., the longest bear market in the S&P 500 lasted more than five years, starting on March 6, 1937 and ending on April 29, 1942, while the shortest bear market only lasted For more than a month, it started on February 19, 2020 and ended on March 23. During a bear market, it takes the S&P a little more than a year on average to bottom and then about two years to recover to its previous high, according to CFRA Research.
In addition, the U.S. two-year and 10-year yield curves briefly inverted for the first time since April, in what many in the market see as a credible signal that a recession is likely in the next year or two. The Nasdaq, which has closed lower for four straight days, was confirmed in bear market territory on March 7 and has fallen about 30% this year.
The CBOE Market Volatility Index, known as Wall Street's fear gauge, earlier surged to 35.05, its highest since May 9, before closing at 34.02. Still, many analysts see the level as low and could mean more selling pressure to come.
Rob Haworth, senior investment strategist at Bank of America Wealth Management, said: "The market was not down as much as it seemed to be disappointed. While there was a sell-off in some stocks, it wasn't deep enough, not violent enough, to show that people were liquidating their positions."
[Russia replaces Saudi Arabia as India's second largest oil supplier]
Russia overtook Saudi Arabia as India's second-biggest oil supplier in May, after Iraq remained the top spot, trade data showed. Indian refiners imported about 819,000 bpd of oil from Russia in May, their highest level so far, from about 277,000 bpd in April. In May of this year, Russian oil accounted for about 16.5% of India's total oil imports. As a result, India's oil imports from Russia and Central Asian countries increased to about 20.5%, while the proportion of oil imports from the Middle East fell to about 59.5%. African oil's share of India's crude imports surged to 11.5% last month from 5.9% in April. India's oil imports in May were 4.98 million barrels per day, the highest since December 2020. The import volume increased by about 5.6% month-on-month and about 19% year-on-year.
[Lebanon reported 174 cases of acute jaundice hepatitis A]
On June 13, local time, the Lebanese Ministry of Public Health notified that 174 cases of acute jaundice hepatitis A had occurred in the country. The Ministry of Health of Lebanon said that samples were being collected to identify the source of infection, and that data on new cases would be released daily in the future.
[Venezuela finds first suspected monkeypox case]
On the 12th local time, the Venezuelan Ministry of Health announced that the country's first suspected case of monkeypox was found at the capital Caracas International Airport.
In general, the geopolitical situation remains tense, Libya’s production cuts have further tightened supply, and some countries have relaxed epidemic restrictions. Oil prices may fluctuate and rise at the 120 mark in the short term. Pay attention to OPEC’s monthly report within days.
At 7:51 GMT+8, U.S. crude oil is now at $120.65 a barrel.
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