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Market News Crude oil trading reminder: The two major oil-producing countries can hardly reach the increase in production line.

Crude oil trading reminder: The two major oil-producing countries can hardly reach the increase in production line.

During the Asian session on September 28, oil prices fell slightly. U.S. oil is now at $75.42/barrel; oil prices soared by nearly 2% on Monday, and U.S. oil broke the 75 mark and closed at more than $75/barrel for the first time since July; Brent crude oil It hit the highest level since October 2018 to 79.05 US dollars per barrel, moving towards the 80 mark. As demand in parts of the world has recovered as the epidemic eases, people are worried about supply. Oil prices will continue to rise, driven by increasing demand but insufficient supply. In addition, oil prices will pay attention to US API data.

LEO
2021-09-28
11969

During the Asian session on Tuesday (September 28), oil prices fell slightly, and U.S. crude oil is now at $75.42 per barrel; oil prices soared by nearly 2% on Monday, and U.S. oil broke through the 75 mark, and closed at over $75 per barrel for the first time since July; Lent crude oil hit the highest level since October 2018 at US$79.05/barrel, moving towards the 80 mark, and both oil daily lines recorded five consecutive positives. As demand in parts of the world has recovered as the epidemic eases, people feel about supply. Worry.



In the days, we will focus on the annual profit rate of industrial enterprises above designated size in China in August, the initial value of the monthly rate of wholesale inventory in the United States in August, the consumer confidence index of the U.S. Chamber of Commerce in September, the monthly rate of the U.S. FHFA house price index in July, the Federal Reserve Chairman Powell and the U.S. Treasury Secretary. Lun delivered a speech and announced the changes in API crude oil inventories in the United States for the week ending September 24 at 4:30 on Wednesday.

Bullish factors affecting oil prices


[U.S. commercial equipment orders rise for the sixth consecutive month]

Commercial equipment orders received by US manufacturers increased in August, which led to six months of strong growth in capital goods investment that helped drive economic growth. According to data released by the US Department of Commerce on Monday, core capital goods orders excluding aircraft and defense supplies rose 0.5% in August, after a 0.3% increase in the previous month. Overall durable goods orders rose 1.8% month-on-month in August, reflecting an increase in commercial aircraft orders.



The median forecast of economists surveyed by Bloomberg was that core capital goods orders increased by 0.4% month-on-month, and total durable goods orders increased by 0.7% month-on-month. Business spending by enterprises on capital goods such as electronic products, construction machinery and power generation equipment has always been a key driver of economic growth. Although capacity constraints have frustrated the factory's production efforts, strong consumer spending has helped boost demand for durable goods in the context of sluggish inventories.

Shipments of core capital goods increased by 0.7%, after an increase of 0.9% in the previous month. This data will be used to calculate the official third-quarter gross domestic product (GDP) figures. Commercial aircraft orders increased by nearly 78%. However, government data is not always directly comparable on a monthly basis.

[Two major oil-producing countries in Africa hardly reach an increase in production line]

The source warned that Nigeria and Angola, the major oil exporters in Africa, continue to hinder the two countries from extracting oil due to insufficient investment and maintenance problems. Therefore, Nigeria and Angola are expected to be unable to increase their production to OPEC quota levels until at least next year.

It is understood that last year, the blockade measures implemented by countries such as Nigeria and Angola to contain the new crown epidemic not only hindered the supply of parts and components, but also hindered the maintenance work of crude oil extraction. In addition, many companies have also postponed major investments due to the impact of crude oil prices falling to their lowest point in 20 years.

Kola Karim, chief executive of Nigerian crude oil producer Shoreline Natural Resources, said that the backlog of repairs involves everything from repairing wells to replacing valves, pumps and pipelines, and these problems affect almost all companies in Nigeria. The company is also planning to conduct supplementary drilling to maintain production stability, so the current backlog means that Nigeria will need one to two quarters to fully capacity. It is reported that Shoreline Natural Resources has 8 production oil fields with a daily output of about 50,000 barrels.

The Angolan Ministry of Finance stated that it may take several years for the country to achieve this quota target. It is reported that in June of this year, Diamantino Azevedo, the Minister of Petroleum of Angola, reduced the 2021 target oil output by 27,000 barrels per day to 1.19 million barrels per day, which is lower than the current quota of 1.33 million barrels per day. In this regard, Azevedo cited the decline in mature oil field production, the delay in drilling due to the new crown epidemic, and the "technical and financial challenges" of deepwater oil exploration in a statement.

[Crude oil market supply tightens under the global energy crisis]

Brent crude oil futures closed at a nearly three-year high on Monday, as there are signs that the global energy crisis has rapidly tightened the supply of crude oil markets. The global benchmark crude oil price soared 1.8% on Monday, but encountered some resistance as it approached the key psychological threshold of $80 per barrel.

U.S. crude oil futures rose 2% to close at more than $75 a barrel, the first time since July. Ben Luckock, co-head of oil trading at Trafigura Group, said that the two benchmark contracts will continue to move as supply cannot keep up with rapidly growing demand. Rise.

Bob Yawger, head of the futures department of Mizuho Securities, said that Brent failed to break through $80 because some speculators were taking profits. "The market should regroup, and it is expected to hit $80 again in the next few days."

Goldman Sachs raised its estimate for the price of Brent crude oil at the end of the year from US$80 to US$90 per barrel, due to the accelerated recovery of fuel demand after the economy emerged from the Delta strain, and the impact of Hurricane Ida on production, resulting in global supply tensions , For 2022, Goldman Sachs lowered its average forecast for the second and fourth quarters from $85 per barrel to $80 per barrel, because of the possibility of Iran-U.S. nuclear agreement being reached before April next year.

Stephen Brennock of oil broker PVM said that the tight supply in the U.S. has also supported prices. The supply disruption in the Gulf of Mexico has exacerbated the decline in inventories. The general rise in energy products has also promoted the European benchmark crude oil. The soaring natural gas price has contributed to its replacement. Rumors of fuel demand also include oil.

[Japan will implement mitigation measures for immigration measures from October 1]

According to the Jiji News Agency, the Chief Cabinet Secretary of the Cabinet of Ministers Kato Katsunobu announced at a press conference on September 27 that for entrants with certificates of COVID-19 vaccination, mitigation measures for immigration measures will be implemented from October 1.

Negative factors affecting oil prices


[Broad market mixed up and down US Treasury yields spurred technology stocks to be sold]

The U.S. stock market was mixed. After the Federal Reserve issued a hawkish statement last week, U.S. Treasury yields rose, and some large technology stocks continued to be sold. The 10-year U.S. Treasury yield once exceeded 1.5%, setting the highest level since June. As a result, the Nasdaq 100 index underperformed the broader market, and stocks of economically sensitive companies such as energy, finance, and small companies rose.

After Fed Chairman Powell said that it may start the code reduction in November, traders advanced the expected time for the interest rate hike. The latest interest rate forecast released by the Fed shows that half of officials expect to tighten policy by the end of 2022. The rise in U.S. Treasury yields has increased concerns about the high valuation of the stock market, especially in the technology sector that is fueling the bull market.

ThinkMarkets analyst Fawad Razaqzada said, “The reason for the sharp rise in yields is that investors expect monetary policy to tighten in the context of soaring inflationary pressures. If yields rise, the impact on growth stocks such as technology stocks may be particularly significant. These companies themselves The dividend yield is low."



On the whole, the decline in inventories, the global energy crisis, and the obstruction of oil extraction in some OPEC member countries are good for oil prices, while the restrictions on the epidemic in various countries have been relaxed to varying degrees, which has increased the demand for crude oil; although the US oil is currently rising slightly at the 75 mark. Obstructed, the distribution of oil is blocked at the psychological threshold of 80; but oil prices will continue to rise, driven by increased demand but insufficient supply. In addition, oil prices will pay attention to US API data.

GMT+8 08:08, US crude oil is now quoted at $75.33/barrel.

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