Crude oil trading reminder: global energy crisis! Crude oil may be used for power generation, the stock is insufficient, and the fund increases its long position

During the Asian session on Friday (September 24), U.S. crude oil hovered around 73.32. Oil prices rose on Thursday, while U.S. oil rose 1.48%; Brent crude oil rose 1.4%, hitting a more than two-month high, affected by fuel demand growth and the United States. The reduction in crude oil inventories was supported by the fact that production in the Gulf of Mexico was still blocked after two hurricanes, and supply concerns caused the fund to increase its long positions.



In the day, we will focus on the annualized total number of new home sales after the August seasonal adjustment in the United States, speeches by Fed Chairman Powell, Vice Chairman Clarida, and Director Bowman; Saturday, at 1:00 AM, the total number of wells drilled in the United States for the week ended September 24 will be announced.

Bullish factors affecting oil prices

[S&P 500 index hits the biggest increase since July 20]

The U.S. stock market rose for the second consecutive day on Thursday, as investors got rid of worries about Asian markets and focused on the Fed’s optimistic outlook on the economic outlook.

The S&P 500 index recorded its biggest gains since July 20. Nine of the 11 industry sectors rose, led by energy and financial sectors. The Federal Reserve indicated on Wednesday that as the economic recovery gains a foothold, it will begin to contract debt purchases this year.

Anu Gaggar, global investment strategist at Commonwealth Financial Network, said, “The hawkish Federal Reserve has unexpectedly been welcomed by the stock market because the stock market interprets this as a belief that the economy continues to be strong and that it has made'substantial progress' from the recovery under the impact of the epidemic, although we are far from The end of quantitative easing and near-zero interest rates is still far away, but the trend seems to be beginning to change. So far, the market has regarded bad news as good news, but the market is showing signs that the economy can sustain itself without monetary policy support. Responding is a refreshing change."

Michael O'Rourke, chief market strategist at JonesTrading, said, "Powell may have made his clearest statement to date-if the economy remains on the recovery track, a reduction will be announced on November 3."

The market increasingly believes that even if the Fed withdraws its stimulus measures, the market will not experience a “downsize panic” as it did in 2013. Investors bet that the impact of the economic and profit recovery momentum will outperform the Fed’s cuts, and ultra-low interest rates will continue to support riskier assets.

[The global energy crisis has increased the possibility of crude oil being used for power generation]

On Thursday, the settlement price of Brent crude oil futuresrose to the highest in nearly three years, because the global energy crisis has increased the possibility of crude oil being used for power generation while stocks are decreasing.

The global economy continues to recover, but the supply continues to be tight. This has caused the price of natural gas in Europe to more than triple since the beginning of the year, and the price of electricity has doubled; but during the same period, the European energy inventory is at the lowest point in more than a decade; Even more frightening is that winter is approaching, and there is almost no time to replenish energy stocks for European countries.

Accenture, a management consulting company, pointed out that the sharp rise in energy prices across Europe will not only hurt household consumption, but also industrial consumption. In Bloomberg's words, this means that the economic recovery in Europe may be derailed.

Because soaring electricity prices can be described as painful to energy-intensive companies like BASF. For example, the company's Ludwigshafen plant, as the world's largest integrated chemical plant, consumes up to 6 billion kilowatt-hours of electricity each year, which is equivalent to the energy contained in about 3.5 million barrels of crude oil.

Crude oil inventories are rapidly tightening. U.S. inventories are at their lowest level since 2018. Production has also declined after the recent Gulf of Mexico hurricane. In addition, inventories in an important hub in Europe are still below the average level during the current period of the year.

Some of the world's largest oil traders and banks expect crude oil prices to rise further this year. Goldman Sachs Group said that in the coming winter, if the northern hemisphere is colder than usual, crude oil prices may exceed $90 per barrel.

[Surprising natural gas prices boost oil prices]

In recent months, global natural gas prices have soared due to increased demand, especially from Asia, low natural gas inventories, and tight supply of natural gas from Russia.

Citi analysts said in the report that in the coming weeks and months, global natural gas prices may continue to show a parabolic trend, with strong crude oil demand and insufficient supply leading to a sharp tightening of the market. Any unexpected surge in demand or supply disruption may push prices up further. Citigroup said that the ripple effect of soaring natural gas prices on other fuels is more extensive than initially thought. Switching to liquefied petroleum gas for heating will affect naphtha and gasoline. Increasing the use of kerosene will affect the price of aviation fuel and diesel. Fuel oil will play a greater role in power generation. Under the situation of limited global crude oil production, Europe The tight supply of natural gas will lead to an increase in oil demand.

[Oil price is expected to rise above US$80/barrel]

Vitol Group, the world's largest independent oil trader, predicts that global oil demand will further rise by 500,000 barrels per day this winter due to energy shortages represented by natural gas driving demand for other fuels.

Vitol CEO Russell Hardy said in an interview in London on Thursday that due to reasons such as higher natural gas prices boosting oil demand, oil prices are likely to rise above US$80 per barrel, which may force OPEC+ oil-producing countries to add more to the market. Supply.

[No progress in Iran negotiations during the UN meeting]

US officials stated that there is no hard time limit for resuming Iranian negotiations; Iranian negotiations did not progress during the UN meeting; and the United States will not sit idly by and ignore Iran’s expansion of its nuclear program.

All nuclear agreement member states except Iran have made it clear that the "Joint Comprehensive Plan of Action" (JCPOA) talks need to be resumed as soon as possible; the problem still needs to be resolved, but the framework of the Iranian nuclear talks has been agreed in the earlier Vienna talks. We need to see if Iran still adheres to the framework.

The United States is prepared to wait patiently, but if Iran does not resume negotiations as soon as possible, the United States will eventually have to decide whether the nuclear agreement still makes sense.

Phil Flynn, a senior analyst at Price Futures Group, said, “The market is beginning to pay attention to real-world issues-there are more and more discussions about global inventory tightening, and people are worried that there will be supply problems as the winter comes. Taking a tougher stance may bring more support to the oil market.

Negative factors affecting oil prices

[The number of people applying for unemployment benefits for the first time in the United States unexpectedly rises for the second consecutive week]

The number of people applying for unemployment benefits for the first time in the United States unexpectedly increased last week. Among them, the number of applicants from California increased sharply, showing signs of fluctuations in data this week, while the labor market continues to recover in an all-round way.



Data released by the Labor Department on Thursday showed that in the week ending September 18, the number of first-time jobless claims rose to 351,000, and the median estimate of Bloomberg survey economists was reduced to 320,000. As of the week of September 11, the number of people who continued to apply for unemployment benefits increased to 2.8 million.

The increase in the number of applicants for unemployment benefits reflects the volatility of this week's data. During the economic recovery, the data has generally declined.

Looking ahead, with the stimulus spending falling, economic growth is expected to slow in the third quarter. Employers in various industries revealed that the end of federal supplementary unemployment benefits has not yet led to an increase in job applications. ? California’s initial jobless claims increased by 24,221, and Virginia increased by 12,879.

[U.S. service industry and manufacturing activity growth rate fell to the lowest level in a year in September]

Affected by the supply chain, labor market, and delta strain, the US service industry and manufacturing activity indicators in September hit their lowest levels in the next year. According to IHS Markit, the comprehensive purchasing managers' index fell to 54.5 from 55.4 a month ago. A reading above 50 indicates economic growth, which has been declining month by month since it hit a record high of 68.7 in May.

Chris Williamson, chief business economist at IHS Markit, said in a statement: “The slowdown is caused by the cooling demand in the service industry, and partly related to the spread of the delta strain. Although manufacturers see demand resilience, factories are supplying. There are more and more problems facing the chain and manpower."

The manufacturer's backlog of orders soared to the highest level since 2007. The production line is still plagued by material shortages, transportation challenges, and recruitment difficulties. But the factory succeeded in passing on higher costs. The report shows that IHS Markit's indicator for measuring factory output prices rose to a new high.



Generally speaking, due to the reduction in inventories, the increase in winter fuel demand and the slowdown of concerns about the Asian market have helped increase oil prices. In addition, the global energy crisis has increased the possibility of crude oil being used for power generation. The Gulf of Mexico after two hurricanes Production is still blocked, and oil prices may continue to rise, and oil prices tend to be bullish in the short term.

GMT+8 8:18, US crude oil is currently quoted at $73.18/barrel.