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Market News International oil prices are facing a technical adjustment, but the bulls still have good reasons to continue holding positions

International oil prices are facing a technical adjustment, but the bulls still have good reasons to continue holding positions

On October 6, international oil prices fell from their multi-year highs and faced technical adjustments after rising for many consecutive days. But investors are worried about global energy supply, and the crude oil market is still facing signs of tight supply. The two cities respectively refreshed their highs of USD 79.78/barrel since November 10, 2014 and their highs of USD 83.47/barrel since October 10, 2018. The two cities have risen for four consecutive days and five consecutive days.

2021-10-06
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On Wednesday (October 6), international oil prices fell from their multi-year highs and faced technical adjustments after rising for many consecutive days. But investors are worried about global energy supply, and the crude oil market is still facing signs of tight supply.

At GMT+8 16:06, NYMEX crude oil futures fell 0.28% to 78.70 US dollars per barrel; ICE Brent crude oil futures fell 0.25% to 82.35 US dollars per barrel.


The two cities respectively refreshed their highs of USD 79.78/barrel since November 10, 2014 and their highs of USD 83.47/barrel since October 10, 2018. The two cities have risen for four consecutive days and five consecutive days.

The Organization of Petroleum Exporting Countries and Russia-led partners (OPEC+) said earlier this week that they would stick to the existing agreement-increasing oil production by 400,000 barrels per day each month, instead of further increasing production.

Oil prices have soared by more than 50% this year, intensifying inflationary pressures. Major crude oil consumers such as the United States and India worry that this will hinder the recovery of the global economy from the new crown epidemic.

However, at the end of last month, the OPEC+ Joint Technical Committee (JTC) stated that it is expected that there will be a supply shortage of 1.1 million barrels per day this year, but it may turn into an oversupply of 1.4 million barrels per day next year.

The source said shortly before the talks at the beginning of the week that despite the pressure to increase production, OPEC+ is worried that the fourth wave of the global new crown epidemic may hit the demand recovery.

ANZ Bank said in a report: “Crude oil has expanded its gains because investors are worried that the energy crisis will push up demand and market supply is tight. Considering the global energy shortage, OPEC+'s growth rate is much lower than market expectations. Not surprisingly, people It is speculated that if demand continues to surge, OPEC will be forced to take action before the next scheduled meeting."

Desmond Tjiang, chief information officer of Conning Asia Pacific, said on Tuesday that the transition to green energy will take longer than expected, but if this time frame is forced to shorten, commodity prices will rise further.

Saudi Arabia’s state-owned oil company, Aramco, said on Tuesday that the country’s flagship oil product, Arabian Light Crude Oil, was lowered to Asia’s official selling price (OSP) in November to a level higher than the Oman/Dubai average price of US$1.30 per barrel; for Northwestern Europe The official price in November was US$2.40/barrel discount to Brent crude oil; for the US, the official price in November was US$1.25/barrel premium to the Argus Sour Crude Oil Index (ASCI).

Inventory data from the United States, the world's largest oil consumer, also showed signs of slowing fuel demand. According to the latest data released by the American Petroleum Institute (API), as of the week of October 1, crude oil inventories unexpectedly increased by 951,000 barrels, an expected decrease of 300,000 barrels; refined oil inventories unexpectedly increased by 345,000 barrels, an expected decrease of 750,000 barrels; Gasoline inventories surged by 3.68 million barrels, an increase far exceeding the expected 150,000 barrels.
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