Market News Crude oil trading reminder: OPEC+ member states resisted to increase production faster, institutions look to US$120
Crude oil trading reminder: OPEC+ member states resisted to increase production faster, institutions look to US$120
During the Asian session on November 2, US crude oil hovered at US$83.97 per barrel; oil prices closed higher on Monday, expectations of strong demand, and the belief that the OPEC+ alliance formed by the Organization of Petroleum Exporting Countries (OPEC) and its allies will not increase production too quickly , Helping to reverse the decline caused by the release of fuel reserves by energy consuming countries earlier; daily oil prices pay attention to API data.
2021-11-02
9868
During the Asian session on Tuesday (November 2), US crude oil hovered at US$83.97 per barrel; oil prices closed higher on Monday, expectations of strong demand, and the OPEC+ alliance formed by the Organization of Petroleum Exporting Countries (OPEC) and its allies will not be too fast The belief in increasing production helped reverse the decline caused by the release of fuel reserves by energy-consuming countries earlier.
In the day, focus on the release of API crude oil inventory data at 4:30 on Wednesday.
[OPEC+ member states have resisted to increase production faster]
OPEC+ may be at odds with the United States, as more and more member states reject US President Joe Biden’s call for the organization to speed up production and help reduce gasoline prices.
Kuwait said on Monday that the oil market is very balanced and the organization should stick to its plan to gradually increase production. A few days before, other key members also issued similar statements, including Iraq, Algeria, Angola and Nigeria.
OPEC+, led by Saudi Arabia and Russia, will hold a meeting on Thursday. Pressure from oil-consuming countries is increasing because oil prices have exceeded US$85 per barrel. U.S. gasoline prices are at a seven-year high, reaching $3.70 per gallon.
The United States, India, Japan and other countries are launching a campaign to force OPEC+ to lift the supply restrictions caused by the epidemic last year more quickly.
Biden said on Sunday that if Russia, Saudi Arabia and other major oil-producing countries do not increase production, people will have no gasoline to commute to work. Although Biden declined to say how he will react if OPEC+ does not change its position, analysts speculate that the United States may sell some strategic oil reserves.
Angolan Oil Minister Diamantino Pedro Azevedo said on Sunday that OPEC+’s plan to increase production by 400,000 barrels per day “is working well and there is no need to deviate”. Many member states, including Saudi Arabia, have stated that they should no longer speed up crude oil extraction, because the epidemic is still restricting demand. After the sharp reduction in production last year, some countries have found it difficult to achieve higher production quotas, and said that faster recovery of production will make their task more difficult.
[European natural gas supply is in a hurry to benefit oil prices]
After Russia switched the direction of some natural gas supply and Algeria stopped supplying gas to Spain, Europe again faced a natural gas shortage. European natural gas prices recorded the biggest increase in two weeks on Monday, after falling by 26% last week. During the weekend, Russian gas changed its usual direction and began to export from Germany to Poland. Spain’s access to natural gas has decreased because Algeria’s 25-year transit agreement to deliver natural gas to it via Morocco has expired without renewal.
European natural gas futures prices have set records for several consecutive days this year. Russia has restricted gas supply to Europe and LNG has been transferred to Asia. Soaring energy costs pushed Europe’s October inflation rate to a 13-year high, sparking concerns about an economic slowdown. Russian President Vladimir Putin has promised to supply more natural gas to Europe, but has not yet implemented it.
Benchmark European natural gas futures rose 15% to 74.35 euros per MWh. Similar contracts in the UK soared 14% to 190 pence/sam, and then fell back to 182 pence. Data from the grid operator Gascade showed that Russia's gas entering the Mallnow compressor station in Germany dropped to zero last Saturday. The Yamal-Europe pipeline transports natural gas from Germany to Poland, and it was increasing further earlier on Monday.
[Crude oil futures will reach US$120 per barrel in a few months]
Bank of America predicts that by the end of June 2022, Brent crude oil prices will reach $120 per barrel. Bank of America analysts such as Francisco Blanch said that an energy crisis led to soaring global natural gas and coal prices, pushing the benchmark London and New York crude oil futures to rebound.
Several oil traders said that as demand exceeds supply and the slowdown in investment in new resources caused by climate issues may deplete reserves, oil prices are rapidly approaching $100 per barrel.
Analysts wrote that the surge in gasoline demand, the rebound of middle distillates (such as diesel and jet kerosene), coupled with restrictions on refining capacity, may accelerate the rise in oil prices until 2022.
[October OPEC oil production is lower than OPEC+ agreement plan increase]
According to a Reuters survey published on Monday, the oil export organization (OPEC)’s October oil production increase was lower than the scale planned in the OPEC+ agreement formed by it and its allies. The impact of increased supplies in Iraq.
The survey found that OPEC’s October output was 27.5 million barrels per day, an increase of 190,000 barrels per day from the previous month, but lower than the 244,000 barrels per day planned in the supply agreement.
With the recovery in demand, OPEC+, formed by OPEC and its allies, is relaxing the production reduction measures implemented in April 2020. However, due to insufficient production capacity in some member states, the alliance has not reached the scale of increase in policy commitments. OPEC+ is also vigilant about excessive production increases to prevent further setbacks in anti-epidemic actions.
Rystad Energy analyst Louise Dickson said: "OPEC+'s production adjustment pace may lag behind the development of demand, rather than risk taking action in advance, and ultimately suffer again."
Reuters data shows that the OPEC+ agreement allowed all member countries to increase production by 400,000 barrels per day in September, of which 253,000 barrels per day were allocated to 10 OPEC-producing countries subject to the agreement. The survey found that because OPEC's overall monthly output growth did not exceed the quota, the implementation rate of the October production reduction agreement increased from 114% to 118%.
[The Dow Jones Index rose to 36,000 points for the first time in the session]
The U.S. stock market once again set a new record, and solid corporate earnings numbers offset the disappointing manufacturing index. U.S. Treasuries fell. The S&P 500 index regained lost ground, energy and consumer discretionary stocks led the gains, and the Dow Jones Industrial Average rose above 36,000 points for the first time in the session.
The Russell 2000 index rose 2.7%, and retail investors such as GameStop and AMC Entertainment Holdings Inc. saw their biggest one-day gains since August. Among the S&P 500 index companies, more than 80% of companies performed better than Wall Street’s expectations. The stock market's rise since the beginning of the earnings season laid the foundation.
At the same time, ISM data showed that in October, US manufacturing companies continued to be under pressure due to supply chain issues, and the US manufacturing industry's growth slowed in October. Supply chain bottlenecks caused the delivery time of raw materials to a record high.
As the Federal Reserve will hold a monetary policy meeting this week, the United States is facing the most serious supply chain problem since the 1970s.
Evan Brown, head of asset allocation at UBS Asset Management, said, “As usual, things to worry about are still emerging. I can only say that the stock market has overcome this negative psychology. As people’s confidence in the economy increases, more is expected. Multi-round buying shifts from growth stocks to value stocks."
Morgan Stanley strategist Michael Wilson said that the bullish trend in the stock market can continue until the Thanksgiving holiday later this month, but it will not last long after that, because the Fed is expected to start to reduce its stimulus measures and corporate earnings growth next year. Expected to slow down further.
[Inventory increase in the largest storage center in the United States]
Crude oil has shrunk gains due to the increase in inventories in the largest storage center in the United States, indicating that the tight supply of crude oil may be easing. Traders cited data from Wood Mackenzie as saying that Cushing, Oklahoma stocks increased by approximately 852,000 barrels between October 26 and October 29.
Rebecca Babin, a senior energy trader at CIBC Private Wealth Management, said that any reversal of the downward trend in Cushing's inventory should "at least calm the panic about inventory."
[U.S. manufacturing growth slowed in October]
In October, US manufacturing companies continued to be under pressure due to supply chain issues, supplier delivery times were extended, and inventory indicators increased. According to data released on Monday, the Institute of Supply Management (ISM) manufacturing index fell to 60.8 from 61.1 in September. A reading above 50 indicates expansion.
ISM’s supplier delivery index rose to a five-month high, indicating that manufacturers are facing longer delivery times for raw materials. Labor shortages, intermittent work stoppages and record imports of goods overwhelmed US ports and delayed deliveries. This also led to a sharp rise in inventory indicators, reaching the highest level since 1984.
Timothy Fiore, chairman of the ISM Manufacturing Survey Committee, said, “In the face of increasing demand, the challenges that companies and suppliers need to overcome have reached unprecedented levels.” “All areas of the manufacturing industry are subject to record-breaking raw material delivery cycles, and there is a continuous shortage of key materials. , The impact of rising commodity prices and difficulties in product transportation."
The average delivery time of raw materials used for production in October stretched to 96 days, the highest level since statistics were available in 1987. The average delivery time of materials used for maintenance, repair and operation also increased to 49 days, which also set a historical record. At the same time, the decrease in new orders has slowed the growth of backlogs to a certain extent. Although ISM's production index was basically flat, the order index dropped to 59.8, the lowest level since June last year.
[The new crown epidemic may leave lasting scars on the US labor market]
U.S. Treasury Secretary Janet Yellen said at the IIEA event in Dublin on Monday that the labor force participation rate in the United States has declined, and it is still “unsure” whether this is temporary. “Although the demand for labor is quite large, but Many people are not in the workforce.” The epidemic is likely to accelerate early retirement of some people who should have retired in a few years.
In general, strong demand and the resistance of OPEC+ members to increase production faster have provided the impetus for oil prices, and mid-line oil prices may continue to rise; but the increase in inventory in the largest storage center in the United States limits the increase in oil prices; OPEC+-related fundamental news affects oil prices Key factors for oil price trends this week; daily oil prices pay attention to API data,
GMT+8 8:21, US crude oil is now quoted at US$84.01/barrel.
In the day, focus on the release of API crude oil inventory data at 4:30 on Wednesday.
Bullish factors affecting oil prices
[OPEC+ member states have resisted to increase production faster]
OPEC+ may be at odds with the United States, as more and more member states reject US President Joe Biden’s call for the organization to speed up production and help reduce gasoline prices.
Kuwait said on Monday that the oil market is very balanced and the organization should stick to its plan to gradually increase production. A few days before, other key members also issued similar statements, including Iraq, Algeria, Angola and Nigeria.
OPEC+, led by Saudi Arabia and Russia, will hold a meeting on Thursday. Pressure from oil-consuming countries is increasing because oil prices have exceeded US$85 per barrel. U.S. gasoline prices are at a seven-year high, reaching $3.70 per gallon.
The United States, India, Japan and other countries are launching a campaign to force OPEC+ to lift the supply restrictions caused by the epidemic last year more quickly.
Biden said on Sunday that if Russia, Saudi Arabia and other major oil-producing countries do not increase production, people will have no gasoline to commute to work. Although Biden declined to say how he will react if OPEC+ does not change its position, analysts speculate that the United States may sell some strategic oil reserves.
Angolan Oil Minister Diamantino Pedro Azevedo said on Sunday that OPEC+’s plan to increase production by 400,000 barrels per day “is working well and there is no need to deviate”. Many member states, including Saudi Arabia, have stated that they should no longer speed up crude oil extraction, because the epidemic is still restricting demand. After the sharp reduction in production last year, some countries have found it difficult to achieve higher production quotas, and said that faster recovery of production will make their task more difficult.
[European natural gas supply is in a hurry to benefit oil prices]
After Russia switched the direction of some natural gas supply and Algeria stopped supplying gas to Spain, Europe again faced a natural gas shortage. European natural gas prices recorded the biggest increase in two weeks on Monday, after falling by 26% last week. During the weekend, Russian gas changed its usual direction and began to export from Germany to Poland. Spain’s access to natural gas has decreased because Algeria’s 25-year transit agreement to deliver natural gas to it via Morocco has expired without renewal.
European natural gas futures prices have set records for several consecutive days this year. Russia has restricted gas supply to Europe and LNG has been transferred to Asia. Soaring energy costs pushed Europe’s October inflation rate to a 13-year high, sparking concerns about an economic slowdown. Russian President Vladimir Putin has promised to supply more natural gas to Europe, but has not yet implemented it.
Benchmark European natural gas futures rose 15% to 74.35 euros per MWh. Similar contracts in the UK soared 14% to 190 pence/sam, and then fell back to 182 pence. Data from the grid operator Gascade showed that Russia's gas entering the Mallnow compressor station in Germany dropped to zero last Saturday. The Yamal-Europe pipeline transports natural gas from Germany to Poland, and it was increasing further earlier on Monday.
[Crude oil futures will reach US$120 per barrel in a few months]
Bank of America predicts that by the end of June 2022, Brent crude oil prices will reach $120 per barrel. Bank of America analysts such as Francisco Blanch said that an energy crisis led to soaring global natural gas and coal prices, pushing the benchmark London and New York crude oil futures to rebound.
Several oil traders said that as demand exceeds supply and the slowdown in investment in new resources caused by climate issues may deplete reserves, oil prices are rapidly approaching $100 per barrel.
Analysts wrote that the surge in gasoline demand, the rebound of middle distillates (such as diesel and jet kerosene), coupled with restrictions on refining capacity, may accelerate the rise in oil prices until 2022.
[October OPEC oil production is lower than OPEC+ agreement plan increase]
According to a Reuters survey published on Monday, the oil export organization (OPEC)’s October oil production increase was lower than the scale planned in the OPEC+ agreement formed by it and its allies. The impact of increased supplies in Iraq.
The survey found that OPEC’s October output was 27.5 million barrels per day, an increase of 190,000 barrels per day from the previous month, but lower than the 244,000 barrels per day planned in the supply agreement.
With the recovery in demand, OPEC+, formed by OPEC and its allies, is relaxing the production reduction measures implemented in April 2020. However, due to insufficient production capacity in some member states, the alliance has not reached the scale of increase in policy commitments. OPEC+ is also vigilant about excessive production increases to prevent further setbacks in anti-epidemic actions.
Rystad Energy analyst Louise Dickson said: "OPEC+'s production adjustment pace may lag behind the development of demand, rather than risk taking action in advance, and ultimately suffer again."
Reuters data shows that the OPEC+ agreement allowed all member countries to increase production by 400,000 barrels per day in September, of which 253,000 barrels per day were allocated to 10 OPEC-producing countries subject to the agreement. The survey found that because OPEC's overall monthly output growth did not exceed the quota, the implementation rate of the October production reduction agreement increased from 114% to 118%.
[The Dow Jones Index rose to 36,000 points for the first time in the session]
The U.S. stock market once again set a new record, and solid corporate earnings numbers offset the disappointing manufacturing index. U.S. Treasuries fell. The S&P 500 index regained lost ground, energy and consumer discretionary stocks led the gains, and the Dow Jones Industrial Average rose above 36,000 points for the first time in the session.
The Russell 2000 index rose 2.7%, and retail investors such as GameStop and AMC Entertainment Holdings Inc. saw their biggest one-day gains since August. Among the S&P 500 index companies, more than 80% of companies performed better than Wall Street’s expectations. The stock market's rise since the beginning of the earnings season laid the foundation.
At the same time, ISM data showed that in October, US manufacturing companies continued to be under pressure due to supply chain issues, and the US manufacturing industry's growth slowed in October. Supply chain bottlenecks caused the delivery time of raw materials to a record high.
As the Federal Reserve will hold a monetary policy meeting this week, the United States is facing the most serious supply chain problem since the 1970s.
Evan Brown, head of asset allocation at UBS Asset Management, said, “As usual, things to worry about are still emerging. I can only say that the stock market has overcome this negative psychology. As people’s confidence in the economy increases, more is expected. Multi-round buying shifts from growth stocks to value stocks."
Morgan Stanley strategist Michael Wilson said that the bullish trend in the stock market can continue until the Thanksgiving holiday later this month, but it will not last long after that, because the Fed is expected to start to reduce its stimulus measures and corporate earnings growth next year. Expected to slow down further.
Negative factors affecting oil prices
[Inventory increase in the largest storage center in the United States]
Crude oil has shrunk gains due to the increase in inventories in the largest storage center in the United States, indicating that the tight supply of crude oil may be easing. Traders cited data from Wood Mackenzie as saying that Cushing, Oklahoma stocks increased by approximately 852,000 barrels between October 26 and October 29.
Rebecca Babin, a senior energy trader at CIBC Private Wealth Management, said that any reversal of the downward trend in Cushing's inventory should "at least calm the panic about inventory."
[U.S. manufacturing growth slowed in October]
In October, US manufacturing companies continued to be under pressure due to supply chain issues, supplier delivery times were extended, and inventory indicators increased. According to data released on Monday, the Institute of Supply Management (ISM) manufacturing index fell to 60.8 from 61.1 in September. A reading above 50 indicates expansion.
ISM’s supplier delivery index rose to a five-month high, indicating that manufacturers are facing longer delivery times for raw materials. Labor shortages, intermittent work stoppages and record imports of goods overwhelmed US ports and delayed deliveries. This also led to a sharp rise in inventory indicators, reaching the highest level since 1984.
Timothy Fiore, chairman of the ISM Manufacturing Survey Committee, said, “In the face of increasing demand, the challenges that companies and suppliers need to overcome have reached unprecedented levels.” “All areas of the manufacturing industry are subject to record-breaking raw material delivery cycles, and there is a continuous shortage of key materials. , The impact of rising commodity prices and difficulties in product transportation."
The average delivery time of raw materials used for production in October stretched to 96 days, the highest level since statistics were available in 1987. The average delivery time of materials used for maintenance, repair and operation also increased to 49 days, which also set a historical record. At the same time, the decrease in new orders has slowed the growth of backlogs to a certain extent. Although ISM's production index was basically flat, the order index dropped to 59.8, the lowest level since June last year.
[The new crown epidemic may leave lasting scars on the US labor market]
U.S. Treasury Secretary Janet Yellen said at the IIEA event in Dublin on Monday that the labor force participation rate in the United States has declined, and it is still “unsure” whether this is temporary. “Although the demand for labor is quite large, but Many people are not in the workforce.” The epidemic is likely to accelerate early retirement of some people who should have retired in a few years.
In general, strong demand and the resistance of OPEC+ members to increase production faster have provided the impetus for oil prices, and mid-line oil prices may continue to rise; but the increase in inventory in the largest storage center in the United States limits the increase in oil prices; OPEC+-related fundamental news affects oil prices Key factors for oil price trends this week; daily oil prices pay attention to API data,
GMT+8 8:21, US crude oil is now quoted at US$84.01/barrel.
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