Market News International oil prices rebounded technically, but two major negative factors have taken control of the market in the short term
International oil prices rebounded technically, but two major negative factors have taken control of the market in the short term
During the European session on November 4, the oil distribution rebounded and the U.S. oil also made up for most of the decline in the day. The two cities plunged by more than 3% overnight, as Iran and the world's major powers agreed to resume nuclear negotiations this month, which may cause the United States to lift sanctions on Iranian oil and increase global supply. The US shale oil plan to increase production and expenditure next year may weaken OPEC+'s efforts to control production and maintain prices.
2021-11-04
11757
During the European session on Thursday (November 4), oil distribution rebounded and US oil also made up for most of the decline in the day. The two cities plunged by more than 3% overnight, as Iran and the world's major powers agreed to resume nuclear negotiations this month, which may cause the United States to lift sanctions on Iranian oil and increase global supply. The US shale oil plan to increase production and expenditure next year may weaken OPEC+'s efforts to control production and maintain prices.
At 15:56 GMT+8, NYMEX crude oil futures fell 0.01% to US$80.85/barrel; ICE Brent crude oil futures rose 0.51% to US$82.40/barrel.
Brent crude oil included more than 3% overnight, and it refreshed its lowest point since October 7 to $81.07/barrel; NYMEX crude oil hit a heavy hit of more than 4.5% the previous day, hitting a new low of $79.69/barrel since October 13.
Overnight, the weekly inventory data released by the US Energy Information Administration (EIA) showed that the increase in crude oil inventories last week was greater than expected. After Iran and the six major powers agreed to resume talks on the resumption of the 2015 Iran nuclear agreement in Vienna on November 29, the decline in oil prices widened. Iran asks the United States to lift sanctions restricting its oil exports.
While Western countries are increasingly worried about Iran’s nuclear development, Iran’s top nuclear negotiator said on Wednesday that negotiations to resume the 2015 Iran nuclear agreement will be resumed on November 29. Later statements from the United States and the European Union also confirmed this.
Since June, negotiations have been stalled. The six rounds of talks so far have been conducted indirectly. Mainly European diplomats shuttle between US and Iranian officials because Iran refuses to have direct contact with the United States. Earlier on Wednesday, the secretary of Iran’s Supreme National Security Council stated that unless U.S. President Biden can guarantee that the United States will not abandon the Iran nuclear agreement again, negotiations to restore the agreement will fail.
Later Thursday, the Organization of Petroleum Exporting Countries and its allies (OPEC+) will hold a meeting. The organization is expected to reconfirm its plan to maintain a steady increase in its monthly supply, despite external calls for OPEC+ to accelerate production. OANDA senior analyst Jeffrey Halley said that the news of the resumption of US-Iran nuclear talks is likely to dash OPEC+’s final hope of increasing output.
OPEC+ sources said that Saudi Arabia and Russia are more confident that rising oil prices will not cause US shale oil manufacturers to quickly return to the market. This reflects their desire to regain oil and gas revenue and support their reasons for opposing faster production increases.
Citibank analysts said that despite pressure from oil-importing countries, OPEC+ may stick to the current policy, "Most OPEC+ members cannot increase production from current levels... Even Saudi Arabia is also emphasizing that it is increasing crude oil production. At the same time, in view of the increase in new crown cases, it is necessary to be cautious about the growth in demand."
In addition, OPEC+ sources said that Saudi Arabia and Russia are more convinced that higher oil prices will not cause a quick response from the US shale industry, which reflects their desire to rebuild income and support their reasons for opposing faster increases in OPEC+ production.
However, the decision of US shale oil producers to refuse to increase oil production amid soaring prices this year may be coming to an end. Several large oil companies, including BP, Chevron and ExxonMobil, plan to increase production or shale oil spending next year, which may weaken OPEC+'s efforts to control supply and support oil prices.
BP said this week that it will increase spending on shale oil assets by $500 million next year. The CEO of Exxon Mobil said last week that the company increased shale oil production by 30% to about 500,000 barrels per day in the last quarter and may add two more drilling rigs in the future. Chevron will add two drilling rigs and complete completion staff this quarter, and increase production in early 2021.
Josh Young, chief investment officer of energy investment agency Bison Interests, said: “As oil prices rise, it is more and more likely that oil production will resume growth.” However, he said that investment income will still be lower than the growth rate before the new crown epidemic.
At 15:56 GMT+8, NYMEX crude oil futures fell 0.01% to US$80.85/barrel; ICE Brent crude oil futures rose 0.51% to US$82.40/barrel.
Brent crude oil included more than 3% overnight, and it refreshed its lowest point since October 7 to $81.07/barrel; NYMEX crude oil hit a heavy hit of more than 4.5% the previous day, hitting a new low of $79.69/barrel since October 13.
Overnight, the weekly inventory data released by the US Energy Information Administration (EIA) showed that the increase in crude oil inventories last week was greater than expected. After Iran and the six major powers agreed to resume talks on the resumption of the 2015 Iran nuclear agreement in Vienna on November 29, the decline in oil prices widened. Iran asks the United States to lift sanctions restricting its oil exports.
While Western countries are increasingly worried about Iran’s nuclear development, Iran’s top nuclear negotiator said on Wednesday that negotiations to resume the 2015 Iran nuclear agreement will be resumed on November 29. Later statements from the United States and the European Union also confirmed this.
Since June, negotiations have been stalled. The six rounds of talks so far have been conducted indirectly. Mainly European diplomats shuttle between US and Iranian officials because Iran refuses to have direct contact with the United States. Earlier on Wednesday, the secretary of Iran’s Supreme National Security Council stated that unless U.S. President Biden can guarantee that the United States will not abandon the Iran nuclear agreement again, negotiations to restore the agreement will fail.
Later Thursday, the Organization of Petroleum Exporting Countries and its allies (OPEC+) will hold a meeting. The organization is expected to reconfirm its plan to maintain a steady increase in its monthly supply, despite external calls for OPEC+ to accelerate production. OANDA senior analyst Jeffrey Halley said that the news of the resumption of US-Iran nuclear talks is likely to dash OPEC+’s final hope of increasing output.
OPEC+ sources said that Saudi Arabia and Russia are more confident that rising oil prices will not cause US shale oil manufacturers to quickly return to the market. This reflects their desire to regain oil and gas revenue and support their reasons for opposing faster production increases.
Citibank analysts said that despite pressure from oil-importing countries, OPEC+ may stick to the current policy, "Most OPEC+ members cannot increase production from current levels... Even Saudi Arabia is also emphasizing that it is increasing crude oil production. At the same time, in view of the increase in new crown cases, it is necessary to be cautious about the growth in demand."
In addition, OPEC+ sources said that Saudi Arabia and Russia are more convinced that higher oil prices will not cause a quick response from the US shale industry, which reflects their desire to rebuild income and support their reasons for opposing faster increases in OPEC+ production.
However, the decision of US shale oil producers to refuse to increase oil production amid soaring prices this year may be coming to an end. Several large oil companies, including BP, Chevron and ExxonMobil, plan to increase production or shale oil spending next year, which may weaken OPEC+'s efforts to control supply and support oil prices.
BP said this week that it will increase spending on shale oil assets by $500 million next year. The CEO of Exxon Mobil said last week that the company increased shale oil production by 30% to about 500,000 barrels per day in the last quarter and may add two more drilling rigs in the future. Chevron will add two drilling rigs and complete completion staff this quarter, and increase production in early 2021.
Josh Young, chief investment officer of energy investment agency Bison Interests, said: “As oil prices rise, it is more and more likely that oil production will resume growth.” However, he said that investment income will still be lower than the growth rate before the new crown epidemic.
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