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Market News International oil prices hit a week high, driven by the surge in natural gas, Europe is worried about heating this winter
International oil prices hit a week high, driven by the surge in natural gas, Europe is worried about heating this winter
On September 23, international oil prices continued their upward trend and hit a new one-week high, thanks to the increase in fuel demand and the greater-than-expected decline in US crude oil inventories, as production in the Gulf of Mexico was still blocked after two hurricanes. The surge in natural gas prices also supported market sentiment. Before the critical winter heating season, European gas reserves were at their lowest levels in at least 10 years.
2021-09-23
6413
On Thursday (September 23), international oil prices continued their upward trend, thanks to increased fuel demand and a greater-than-expected decline in US crude oil inventories, as production in the Gulf of Mexico was still blocked after two hurricanes. The surge in natural gas prices also supported market sentiment.
GMT+8 14:51, NYMEX crude oil futures rose 0.24% to 72.40 US dollars per barrel; ICE Brent crude oil futures rose 0.24% to 76.37 US dollars per barrel. Both cities hit a new one-week high, reaching 72.54 US dollars/barrel and 75.70 US dollars/barrel respectively.
Overnight, NYMEX crude oil jumped more than 2%, and Bursa oil also closed up nearly 1.6%. According to data released by the US Energy Information Administration (EIA), as of the week of September 17, US crude oil inventories fell by 3.481 million barrels to 414 million barrels, the lowest level since October 2018, and the decline exceeded analyst expectations. With the relaxation of the travel ban and strong fuel demand, the utilization rate of US East Coast refineries rose to 93%, the highest level since May 2019.
Jeffrey Halley, an analyst at brokerage OANDA, said: "With the slow recovery of production in the Gulf of Mexico and the continued increase in natural gas prices, the structural outlook for oil remains positive, because OPEC+ cannot even complete its current production quota."
According to a report from the Iraqi state news agency INA on Wednesday, the Iraqi Oil Minister said that as the global economy recovers, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are working hard to keep crude oil prices at around US$70 per barrel.
Minister Ihsan Abdul-Jabbar added that the ministry hopes to maintain oil prices above US$65 per barrel. Iraq’s oil exports will continue to increase at an average rate of 400,000 barrels per month, and the country’s goal is to export 3.4 million barrels per day in September.
Due to long years of insufficient investment or delays in maintenance work due to the new crown epidemic, several OPEC+ oil producing countries, including Nigeria, Angola and Kazakhstan, have been working hard to increase production in recent months.
In recent months, global natural gas prices have risen sharply. This is the result of a combination of many factors, including increased demand, especially the recovery period of demand after the epidemic in Asia, low natural gas inventories, and Russian natural gas supplies are tighter than usual.
ANZ Research analysts said in a report that soaring natural gas prices also supported market sentiment, "If this winter becomes colder, the shortage of natural gas supply may prompt power companies to switch from natural gas to oil."
According to the latest European gas infrastructure data, European gas storage is at the lowest level in at least 10 years before the critical winter heating season, which exacerbates the risk of further price surges from record highs.
Chinese Premier Li Keqiang presided over an executive meeting of the State Council on Wednesday (September 22), demanding to maintain the continuity and stability of macroeconomic policies, enhance effectiveness, and do a good job in pre-adjustment, fine-tuning and inter-cyclical adjustments. More market-oriented methods are used to stabilize commodity prices and ensure the supply of electricity and natural gas in winter.
According to James Huckstepp, S&P Global Platts' natural gas analysis manager for Europe, the Middle East and Africa, due to strong demand, relatively weak renewable energy generation and strong potential power demand, natural gas reserves have been emptied last winter, "Asia Demand for electricity and natural gas has also been strong, which keeps LNG away from Europe. Coupled with this summer's global supply tightening and limited storage, we have reached a record low when we enter the heating season."
Huckstepp also added that regardless of whether the "Beixi-2" pipeline is up and running during the year, natural gas supply should remain relatively tight for the rest of this year. Standard & Poor's Global expects that Russian natural gas delivery to Europe via the "Beixi-2" pipeline may begin in the fourth quarter.
GMT+8 14:51, NYMEX crude oil futures rose 0.24% to 72.40 US dollars per barrel; ICE Brent crude oil futures rose 0.24% to 76.37 US dollars per barrel. Both cities hit a new one-week high, reaching 72.54 US dollars/barrel and 75.70 US dollars/barrel respectively.
Overnight, NYMEX crude oil jumped more than 2%, and Bursa oil also closed up nearly 1.6%. According to data released by the US Energy Information Administration (EIA), as of the week of September 17, US crude oil inventories fell by 3.481 million barrels to 414 million barrels, the lowest level since October 2018, and the decline exceeded analyst expectations. With the relaxation of the travel ban and strong fuel demand, the utilization rate of US East Coast refineries rose to 93%, the highest level since May 2019.
Jeffrey Halley, an analyst at brokerage OANDA, said: "With the slow recovery of production in the Gulf of Mexico and the continued increase in natural gas prices, the structural outlook for oil remains positive, because OPEC+ cannot even complete its current production quota."
According to a report from the Iraqi state news agency INA on Wednesday, the Iraqi Oil Minister said that as the global economy recovers, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are working hard to keep crude oil prices at around US$70 per barrel.
Minister Ihsan Abdul-Jabbar added that the ministry hopes to maintain oil prices above US$65 per barrel. Iraq’s oil exports will continue to increase at an average rate of 400,000 barrels per month, and the country’s goal is to export 3.4 million barrels per day in September.
Due to long years of insufficient investment or delays in maintenance work due to the new crown epidemic, several OPEC+ oil producing countries, including Nigeria, Angola and Kazakhstan, have been working hard to increase production in recent months.
In recent months, global natural gas prices have risen sharply. This is the result of a combination of many factors, including increased demand, especially the recovery period of demand after the epidemic in Asia, low natural gas inventories, and Russian natural gas supplies are tighter than usual.
ANZ Research analysts said in a report that soaring natural gas prices also supported market sentiment, "If this winter becomes colder, the shortage of natural gas supply may prompt power companies to switch from natural gas to oil."
According to the latest European gas infrastructure data, European gas storage is at the lowest level in at least 10 years before the critical winter heating season, which exacerbates the risk of further price surges from record highs.
Chinese Premier Li Keqiang presided over an executive meeting of the State Council on Wednesday (September 22), demanding to maintain the continuity and stability of macroeconomic policies, enhance effectiveness, and do a good job in pre-adjustment, fine-tuning and inter-cyclical adjustments. More market-oriented methods are used to stabilize commodity prices and ensure the supply of electricity and natural gas in winter.
According to James Huckstepp, S&P Global Platts' natural gas analysis manager for Europe, the Middle East and Africa, due to strong demand, relatively weak renewable energy generation and strong potential power demand, natural gas reserves have been emptied last winter, "Asia Demand for electricity and natural gas has also been strong, which keeps LNG away from Europe. Coupled with this summer's global supply tightening and limited storage, we have reached a record low when we enter the heating season."
Huckstepp also added that regardless of whether the "Beixi-2" pipeline is up and running during the year, natural gas supply should remain relatively tight for the rest of this year. Standard & Poor's Global expects that Russian natural gas delivery to Europe via the "Beixi-2" pipeline may begin in the fourth quarter.
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