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Market News International oil prices rebounded, API inventories fell more than expected; but be wary of new negatives in the United States

International oil prices rebounded, API inventories fell more than expected; but be wary of new negatives in the United States

On September 1, international oil prices rebounded after US industry reports showed that crude oil inventories fell more than expected last week. However, Hurricane Ida caused the closure of refineries near the Gulf of Mexico in the United States, and it is expected that the loss of refinery demand will be greater and more lasting than the loss of crude oil supply. OPEC+ sources said that despite pressure from the United States to increase production, OPEC+ may maintain its current production increase plan unchanged.

LEO
2021-09-01
9995

On Wednesday (September 1), international oil prices rebounded after US industry reports showed that crude oil inventories fell more than expected last week. However, Hurricane Ida caused the closure of refineries near the Gulf of Mexico in the United States, and it is expected that the loss of refinery demand will be greater and more lasting than the loss of crude oil supply.

GMT+8 15:55, NYMEX crude oil futures rose 0.89% to 69.11 US dollars per barrel; ICE Brent crude oil futures rose 0.91% to 72.28 US dollars per barrel.


Avtar Sandu, a senior commodity trader at Phillips Futures, said that the American Petroleum Institute (API) crude oil inventories announced on Tuesday (August 31) fell more than expected, which is a bullish factor and supported oil prices.

According to data from the American Petroleum Institute (API), as of the week of August 27, crude oil inventories fell by 4.045 million barrels, which was significantly higher than the survey’s estimate of 2.833 million barrels. The official U.S. Energy Information Administration (EIA) inventory data will be released at 22:30 GMT+8 on Wednesday. The market estimates that EIA crude oil inventories fell by 2.927 million barrels.

However, analysts said that due to the gradual recovery of offshore oil and natural gas production in the Gulf of Mexico, US crude oil prices are expected to continue to be under pressure, but power outages may delay the restart of refineries and refinery operations may take longer to return to normal.

The U.S. Department of Energy estimates that due to the impact of Hurricane Ida, the Louisiana refinery shut down 2.3 million barrels per day of refining capacity, accounting for 13% of the U.S. production capacity. At the same time, approximately 94% of oil and gas production on the U.S. side of the Gulf of Mexico remains suspended.

Bjornar Tonhaugen, head of oil markets at Rystad Energy, said in a report: "We believe that the loss in demand from US refineries will be greater and more lasting than the loss in crude oil supply." The agency also said that this may drag NYMEX in September. Crude oil futures prices.

The Organization of Petroleum Exporting Countries and Russia and other partner countries (OPEC+) will meet at 23:00 GMT+8 on Wednesday to decide whether to maintain the plan to increase production by 400,000 barrels per day until December. OPEC+ sources said that despite pressure from the United States to accelerate its production increase, OPEC+ may maintain its current production increase plan unchanged.

DBS Bank analyst Suvro Sarkar said: "With the spread of Delta variants that pressure demand and market sentiment, it is unlikely that oil prices will overheat in the short term."

LBBW analyst Frank Schallenberger said: "Considering the strong oil demand and high inflation figures, the decision to increase OPEC+ production is reasonable. But the question may be, if demand slows down due to a potential Delta variant virus problem, is OPEC+ true? Will stick to their (current increase in production) plan."

Deutsche Commerzbank analyst Carsten Fritsch predicts, "(US production) will gradually increase, and it will not be too noticeable and not enough to make OPEC+ feel a headache."

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