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Market News Declining consumer confidence, high oil prices retracement, OPEC+ pressure to increase production remains unabated
Declining consumer confidence, high oil prices retracement, OPEC+ pressure to increase production remains unabated
On September 29, US crude oil continued its downward trend. Cooling risk sentiment, declining consumer confidence, and unexpected rise in crude oil inventories hit oil prices. At the same time, OPEC+ production increase expectations are heating up.
2021-09-29
7556
On Wednesday (September 29), US crude oil continued its downward trend. The cooling of risk sentiment and the decline in consumer confidence hit oil prices. The rise in API crude oil inventories surprised the market. Investors are currently worried that the evening EIA crude oil inventory data is still Will be bad for oil prices. In addition, as oil prices rise to around US$80, OPEC+ will gradually increase pressure to increase production next week.
Oil prices have been rising recently because major economies have recovered from the epidemic blockade and fuel demand has rebounded. At the same time, the supply interruption in the U.S. Gulf of Mexico has not yet recovered.
On Tuesday, oil prices rose and fell. US consumer confidence fell for the third consecutive month in September, affected by concerns about delta strains and rising prices.
Consumers are not so optimistic about their future income and employment prospects, which also undermines the confidence of investors in the oil market.
At the same time, the call for the Fed to reduce its weight during the year has remained unabated. The continued rise in the yields of the US dollar and US debt has hit the trend of US stocks. The three major stock indexes fell sharply on Tuesday, and the risk sentiment quickly cooled down and spread to the oil market.
Sevens Report Research co-editor Tyler Richey said: The safe-haven capital flow that hit US stocks on Tuesday dragged down the prices of crude oil and other industrial commodities. The release of the rather weak consumer confidence report this morning also does not help the demand outlook.
According to data released by API, as of the week of September 24, crude oil inventories unexpectedly increased by 4.127 million barrels, expected to be 2.333 million barrels, and gasoline inventories increased by 3.555 million barrels, expected to be 1.233 million barrels. The data were both positive for oil prices.
The Organization of the Petroleum Exporting Countries (OPEC) predicted on Tuesday that oil demand will grow strongly as the global economy recovers from the epidemic in the next few years. The transition is in progress.
Traders expect that OPEC+ will decide to keep supply tight when it meets next week.
ANZ Bank’s Research Department said in a report: “Although the supply background has not changed much, when the oil price reaches US$80/barrel, the pressure on OPEC+ countries to increase production quotas will increase.”
ThinkMarkets market analyst Fawad Razaqzada said: With Brent crude oil briefly breaking through US$80 per barrel, investors seem to realize that oil prices have become too strong. During this period, the risk of stagnant inflation has risen, and OPEC+ may increase production, which is difficult to prove. This price is reasonable.
DTN market analyst Troy Vincent said: It is obvious that greater macroeconomic development is putting pressure on crude oil prices. The intraday price trend on Tuesday showed that the long and short camps continued to see the saw. On the one hand, OPEC's slow recovery of production and the recent unexpected interruption of crude oil production have brought bullish forces, but the global economy has brought bearish shocks due to weak economic growth in Asia. And the Fed is ready to start cutting debt purchases.
Vincent also pointed out that the U.S. dollar may also continue to strengthen, which will have an adverse effect on oil prices denominated in U.S. dollars in the coming months.
Since OPEC+ agreed to increase production in August, it has been difficult to increase production. Commercial Bank of Germany analyst Carsten Fritsch said: OPEC+ is facing increasing pressure to increase production to ease supply, and OPEC+ may make this decision at a meeting next week.
(U.S. crude oil daily chart)
At 12:02 GMT+8, U.S. crude oil was quoted at $74.13 per barrel.
Oil prices have been rising recently because major economies have recovered from the epidemic blockade and fuel demand has rebounded. At the same time, the supply interruption in the U.S. Gulf of Mexico has not yet recovered.
On Tuesday, oil prices rose and fell. US consumer confidence fell for the third consecutive month in September, affected by concerns about delta strains and rising prices.
Consumers are not so optimistic about their future income and employment prospects, which also undermines the confidence of investors in the oil market.
At the same time, the call for the Fed to reduce its weight during the year has remained unabated. The continued rise in the yields of the US dollar and US debt has hit the trend of US stocks. The three major stock indexes fell sharply on Tuesday, and the risk sentiment quickly cooled down and spread to the oil market.
Sevens Report Research co-editor Tyler Richey said: The safe-haven capital flow that hit US stocks on Tuesday dragged down the prices of crude oil and other industrial commodities. The release of the rather weak consumer confidence report this morning also does not help the demand outlook.
According to data released by API, as of the week of September 24, crude oil inventories unexpectedly increased by 4.127 million barrels, expected to be 2.333 million barrels, and gasoline inventories increased by 3.555 million barrels, expected to be 1.233 million barrels. The data were both positive for oil prices.
The Organization of the Petroleum Exporting Countries (OPEC) predicted on Tuesday that oil demand will grow strongly as the global economy recovers from the epidemic in the next few years. The transition is in progress.
Traders expect that OPEC+ will decide to keep supply tight when it meets next week.
ANZ Bank’s Research Department said in a report: “Although the supply background has not changed much, when the oil price reaches US$80/barrel, the pressure on OPEC+ countries to increase production quotas will increase.”
ThinkMarkets market analyst Fawad Razaqzada said: With Brent crude oil briefly breaking through US$80 per barrel, investors seem to realize that oil prices have become too strong. During this period, the risk of stagnant inflation has risen, and OPEC+ may increase production, which is difficult to prove. This price is reasonable.
DTN market analyst Troy Vincent said: It is obvious that greater macroeconomic development is putting pressure on crude oil prices. The intraday price trend on Tuesday showed that the long and short camps continued to see the saw. On the one hand, OPEC's slow recovery of production and the recent unexpected interruption of crude oil production have brought bullish forces, but the global economy has brought bearish shocks due to weak economic growth in Asia. And the Fed is ready to start cutting debt purchases.
Vincent also pointed out that the U.S. dollar may also continue to strengthen, which will have an adverse effect on oil prices denominated in U.S. dollars in the coming months.
Since OPEC+ agreed to increase production in August, it has been difficult to increase production. Commercial Bank of Germany analyst Carsten Fritsch said: OPEC+ is facing increasing pressure to increase production to ease supply, and OPEC+ may make this decision at a meeting next week.
(U.S. crude oil daily chart)
At 12:02 GMT+8, U.S. crude oil was quoted at $74.13 per barrel.
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