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Market News Crude oil trading reminder: the effect of curbing oil prices is unknown, the United States urges Russia to increase production, waiting for OPEC+ to take action
Crude oil trading reminder: the effect of curbing oil prices is unknown, the United States urges Russia to increase production, waiting for OPEC+ to take action
At the beginning of the Asian market on November 26, U.S. crude oil hovered around $77.37 per barrel; with U.S. traders on vacation, crude oil prices were basically stable on Thursday. The Organization of Petroleum Exporting Countries previously stated that the planned coordinated release of reserves may be Exacerbating the crude oil surplus that is expected to occur early next year, trading was light during Thanksgiving in the United States, and the market will wait for the OPEC+ meeting next week.
2021-11-26
8465
On Friday (November 26) in the Asian market in early trading, US crude oil weakened slightly, fell 1.5% at one time, hitting a three-day low to $77.23/barrel. Currently trading at around 77.43; with US traders on leave, crude oil prices basically stabilized on Thursday, after the Organization of the Petroleum Exporting Countries (OPEC) stated that the planned coordinated release of reserves may intensify the crude oil that is expected to appear early next year Oversupply, trading was light during Thanksgiving in the United States, and the market will wait for the OPEC+ meeting next week.
Note within the day: due to Thanksgiving holiday, the New York Stock Exchange closed ahead of schedule at 02:00 GMT+8 November 27; ICE’s Brent crude oil contract ended ahead of schedule at 03:00 GMT+8 27; CME’s precious metals , The trading of US crude oil contracts ended ahead of schedule at 02:45 on the 27th GMT+8, and the trading of its foreign exchange contracts ended ahead of schedule at 02:15 on the 27th GMT+8.
[The United States will sell 32 million barrels of crude oil reserves to reduce oil prices]
According to foreign media reports on the 25th, the U.S. Department of Energy recently stated that the United States will release 32 million barrels of crude oil from four strategic oil reserves for auction sale, and delivery is expected.
According to reports, this batch of crude oil came from four reserves in Texas and Louisiana, mainly sulfur-containing crude oil. The sale is expected to reduce the price of US crude oil. Delivery will take place from the end of December to April 2022, and buyers must return between 2022 and 2024.
[The United States is trying to persuade Russia to increase oil production to curb oil prices]
Ifax quoted the Russian Ministry of Foreign Affairs on Thursday as saying that the United States is trying to persuade Russia to increase oil production in order to reduce global oil prices.
In addition, the Iraqi Ministry of Petroleum stated that the Organization of the Petroleum Exporting Countries (OPEC) is very cautious about output and reducing supply. This strategy has been quite successful. OPEC does not want to lose such success because the oil market is still quite fragile and any additional supply will be added. Both may lead to price collapse or oversupply.
[Japanese experts believe that the effect of releasing oil reserves remains to be seen]
Japan announced on the 24th that it will cooperate with the United States to release its strategic oil reserves in order to stabilize oil prices and release the country’s excess oil reserves without violating the Petroleum Reserve Law. Japanese experts believe that the effect of this multi-country joint release of oil reserves remains to be seen.
According to reports, the Japanese government is expected to release 4.2 million barrels first, which is approximately equivalent to Japan’s domestic demand for one to two days, and may continue to release additional releases as needed.
Ken Koyama, the chief researcher of the Energy Economic Research Institute of Japan, believes that Japan only releases excess reserves and the release is limited. From the perspective of increasing supply, the effect of this joint release of oil reserves is still difficult to judge.
As investors worried that the release of reserves by major consumer countries would trigger a counterattack by oil-producing countries, after the Japanese government officially stated its position on the 24th, oil prices on the Tokyo Commodity Exchange rose instead of falling, and the prices of Middle Eastern crude oil futures rose significantly.
Suzuki Kee, a professor at the Faculty of Economics at the University of Japanese Gakushuin, said that he could consider taking this as an opportunity to establish a normalized mechanism. Countries will significantly increase their oil reserves and jointly release them when oil prices soar. As long as the reserves are sufficient, simply sending a signal that it is possible to release oil reserves will help stabilize oil prices.
[Britain suspends inbound flights from several African countries]
On the evening of the 25th local time, British Health Secretary Javid announced that from 12 o'clock on the 26th, the United Kingdom will include six African countries on the red list and at the same time suspend flights from these countries to the United Kingdom.
The six countries mentioned above are South Africa, Namibia, Zimbabwe, Botswana, Lesotho and Swaziland.
Javid said that scientists are "deeply concerned" about the new coronavirus variant B.1.1.529, but more research is needed on it. This mutant strain has a large number of mutations and is likely to be more infectious.
[Increased demand in winter may cause high oil prices to continue]
The northern hemisphere has entered winter and energy demand has increased. If there are no new factors to ease supply and demand, such as the further expansion of the release of reserves in major consumer countries or the increase in output of oil-producing countries, high oil prices may continue.
OPEC and its allies will hold a meeting next week. Some OPEC representatives warned this week that the release of strategic reserves may cause the organization to cancel the increase in production originally scheduled for January. The International Energy Agency (IEA) accused Saudi Arabia, Russia and other major energy producers of creating “artificial tensions” in the global oil and gas market, and urged OPEC+ to speed up the restoration of supply; ANZ said the alliance will suspend production increases for demand. Provide a cushion for the unfavorable factors.
[The UAE stated that it did not have a “preset position” before the OPEC+ Petroleum Conference]
The UAE stated that it will not presume a position on OPEC+ oil production strategy before the meeting next week. The OPEC+ major oil producing countries alliance, the official media tweeted quoting the Ministry of Energy’s news, saying, “The UAE still fully supports it, and there is no presupposition for the next meeting. The country’s position.” The country “reiterated that any decision will be made collectively.”
As these comments are released, traders and analysts are arguing whether OPEC+ will respond to the release of its strategic reserves of crude oil by the United States and other consumer countries by suspending or interrupting monthly production increases. OPEC+ led by Saudi Arabia and Russia will hold a meeting on December 2. Kuwait, another important member of OPEC+, also stated that it fully supports OPEC+'s "cooperation declaration".
JPMorgan Chase said that in view of the release of strategic oil reserves and the surge of new crown cases in Europe, OPEC+ may suspend production in the first quarter of next year.
JP Morgan Chase analysts such as Natasha Kaneva said, “The expected release of strategic oil reserves, coupled with the weakening of the physical market caused by the European blockade, further reduces the need for OPEC+ to take action.”
"We have predicted that the global oil market will enter a state of oversupply throughout the first half of 2022, and we expect OPEC+ will not intervene during the January-March period." Banks including Citigroup disagree with this view, and the group is expected to Choose policy continuity and increase daily output by 400,000 barrels in January.
In general, although the United States has released crude oil reserves in multiple countries, it has limited impact on curbing oil price increases. However, it is necessary to pay attention to the short-term impact of the epidemic in Europe on oil prices. In addition, due to the light trading during Thanksgiving and the approaching weekend, investors may More attention will be paid to the OPEC+ meeting next week.
GMT+8 8:12, US crude oil is now quoted at 77.43 US dollars per barrel.
Note within the day: due to Thanksgiving holiday, the New York Stock Exchange closed ahead of schedule at 02:00 GMT+8 November 27; ICE’s Brent crude oil contract ended ahead of schedule at 03:00 GMT+8 27; CME’s precious metals , The trading of US crude oil contracts ended ahead of schedule at 02:45 on the 27th GMT+8, and the trading of its foreign exchange contracts ended ahead of schedule at 02:15 on the 27th GMT+8.
Negative factors affecting oil prices
[The United States will sell 32 million barrels of crude oil reserves to reduce oil prices]
According to foreign media reports on the 25th, the U.S. Department of Energy recently stated that the United States will release 32 million barrels of crude oil from four strategic oil reserves for auction sale, and delivery is expected.
According to reports, this batch of crude oil came from four reserves in Texas and Louisiana, mainly sulfur-containing crude oil. The sale is expected to reduce the price of US crude oil. Delivery will take place from the end of December to April 2022, and buyers must return between 2022 and 2024.
[The United States is trying to persuade Russia to increase oil production to curb oil prices]
Ifax quoted the Russian Ministry of Foreign Affairs on Thursday as saying that the United States is trying to persuade Russia to increase oil production in order to reduce global oil prices.
In addition, the Iraqi Ministry of Petroleum stated that the Organization of the Petroleum Exporting Countries (OPEC) is very cautious about output and reducing supply. This strategy has been quite successful. OPEC does not want to lose such success because the oil market is still quite fragile and any additional supply will be added. Both may lead to price collapse or oversupply.
[Japanese experts believe that the effect of releasing oil reserves remains to be seen]
Japan announced on the 24th that it will cooperate with the United States to release its strategic oil reserves in order to stabilize oil prices and release the country’s excess oil reserves without violating the Petroleum Reserve Law. Japanese experts believe that the effect of this multi-country joint release of oil reserves remains to be seen.
According to reports, the Japanese government is expected to release 4.2 million barrels first, which is approximately equivalent to Japan’s domestic demand for one to two days, and may continue to release additional releases as needed.
Ken Koyama, the chief researcher of the Energy Economic Research Institute of Japan, believes that Japan only releases excess reserves and the release is limited. From the perspective of increasing supply, the effect of this joint release of oil reserves is still difficult to judge.
As investors worried that the release of reserves by major consumer countries would trigger a counterattack by oil-producing countries, after the Japanese government officially stated its position on the 24th, oil prices on the Tokyo Commodity Exchange rose instead of falling, and the prices of Middle Eastern crude oil futures rose significantly.
Suzuki Kee, a professor at the Faculty of Economics at the University of Japanese Gakushuin, said that he could consider taking this as an opportunity to establish a normalized mechanism. Countries will significantly increase their oil reserves and jointly release them when oil prices soar. As long as the reserves are sufficient, simply sending a signal that it is possible to release oil reserves will help stabilize oil prices.
[Britain suspends inbound flights from several African countries]
On the evening of the 25th local time, British Health Secretary Javid announced that from 12 o'clock on the 26th, the United Kingdom will include six African countries on the red list and at the same time suspend flights from these countries to the United Kingdom.
The six countries mentioned above are South Africa, Namibia, Zimbabwe, Botswana, Lesotho and Swaziland.
Javid said that scientists are "deeply concerned" about the new coronavirus variant B.1.1.529, but more research is needed on it. This mutant strain has a large number of mutations and is likely to be more infectious.
Bullish factors affecting oil prices
[Increased demand in winter may cause high oil prices to continue]
The northern hemisphere has entered winter and energy demand has increased. If there are no new factors to ease supply and demand, such as the further expansion of the release of reserves in major consumer countries or the increase in output of oil-producing countries, high oil prices may continue.
OPEC and its allies will hold a meeting next week. Some OPEC representatives warned this week that the release of strategic reserves may cause the organization to cancel the increase in production originally scheduled for January. The International Energy Agency (IEA) accused Saudi Arabia, Russia and other major energy producers of creating “artificial tensions” in the global oil and gas market, and urged OPEC+ to speed up the restoration of supply; ANZ said the alliance will suspend production increases for demand. Provide a cushion for the unfavorable factors.
[The UAE stated that it did not have a “preset position” before the OPEC+ Petroleum Conference]
The UAE stated that it will not presume a position on OPEC+ oil production strategy before the meeting next week. The OPEC+ major oil producing countries alliance, the official media tweeted quoting the Ministry of Energy’s news, saying, “The UAE still fully supports it, and there is no presupposition for the next meeting. The country’s position.” The country “reiterated that any decision will be made collectively.”
As these comments are released, traders and analysts are arguing whether OPEC+ will respond to the release of its strategic reserves of crude oil by the United States and other consumer countries by suspending or interrupting monthly production increases. OPEC+ led by Saudi Arabia and Russia will hold a meeting on December 2. Kuwait, another important member of OPEC+, also stated that it fully supports OPEC+'s "cooperation declaration".
JPMorgan Chase said that in view of the release of strategic oil reserves and the surge of new crown cases in Europe, OPEC+ may suspend production in the first quarter of next year.
JP Morgan Chase analysts such as Natasha Kaneva said, “The expected release of strategic oil reserves, coupled with the weakening of the physical market caused by the European blockade, further reduces the need for OPEC+ to take action.”
"We have predicted that the global oil market will enter a state of oversupply throughout the first half of 2022, and we expect OPEC+ will not intervene during the January-March period." Banks including Citigroup disagree with this view, and the group is expected to Choose policy continuity and increase daily output by 400,000 barrels in January.
In general, although the United States has released crude oil reserves in multiple countries, it has limited impact on curbing oil price increases. However, it is necessary to pay attention to the short-term impact of the epidemic in Europe on oil prices. In addition, due to the light trading during Thanksgiving and the approaching weekend, investors may More attention will be paid to the OPEC+ meeting next week.
GMT+8 8:12, US crude oil is now quoted at 77.43 US dollars per barrel.
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