Market News OPEC+ rejects calls from the United States to increase production, U.S. oil plunges 3% and hits a new low in nearly a month
OPEC+ rejects calls from the United States to increase production, U.S. oil plunges 3% and hits a new low in nearly a month
U.S. oil closed down 1.53 US dollars in late trading on October 4, to close at 79.33 US dollars per barrel. Affected by OPEC+ meeting to approve an increase of 400,000 barrels per day in December, oil prices rose by more than 3%. But as the White House stated that Washington will consider a series of tools to ensure that people have access to affordable energy. The deepest drop in the US oil market was more than 3%, reaching $78.25 per barrel, the lowest level since October 7.
2021-11-05
10966
On Thursday (October 4), US oil fell 1.53 US dollars in late trading, or 1.89%, to close at 79.33 US dollars per barrel. Bilbao oil fell 1.04 US dollars, or 1.27 US dollars per barrel, to close at 80.95 US dollars per barrel. Earlier, OPEC+ maintained its established pace of increasing production, ignoring the US call for increasing production, leading the market to speculate that the US might use strategic reserves. At the same time, Saudi Arabia's oil production will soon exceed 10 million barrels per day, which is the first time since the beginning of the new crown epidemic, putting oil prices under pressure.
OPEC+, formed by Saudi Arabia and other OPEC member states and their allies, agreed to stick to the original plan to increase production by 400,000 barrels per day in December. Saudi Arabia has rejected calls for OPEC+ to speed up the increase in oil supply.
Sources from OPEC+ said that if the United States believes that the world economy needs more energy, it has enough capacity to increase production. Saudi Arabia and Russia increasingly believe that higher prices will not prompt a rapid increase in US shale oil production. Saudi Energy Minister Prince Abdulaziz said on Thursday that oil-producing countries are worried about increasing production too quickly and that they are worried about another setback in the fight against the epidemic and economic recovery. Due to the slowdown in consumption, oil inventories will see "huge" growth at the end of 2021 and early 2022.
Russian Deputy Prime Minister Alexander Novak stated that since August, OPEC's supply to the global market has increased by 2 million barrels per day, and will continue to increase by 400,000 barrels per month in the second half of 2021 and early 2022. /Day plan. In October, the EU's oil demand showed some signs of decline. Global oil demand is still affected by the Delta variant virus outbreak.
A White House spokesperson said on Thursday: "At a critical moment in the global economic recovery, OPEC+ seems unwilling to use its existing production capacity and capabilities. The President believes that Americans should have access to affordable energy, including at gas stations, and instructed us to continue. Monitor the market and be prepared to use all tools when needed." The United States is the world's largest oil producer, and its production has fallen sharply in 2020. Since then, the rate of recovery of production has been much slower than expected.
UBS strategist Giovanni Staunovo said in the report that the price of Brent crude oil is expected to reach US$90 per barrel in the next few months. After OPEC+ decides to maintain a cautious increase in production, the market is still undersupply. OPEC and its allies insisted on its plan to increase production by 400,000 barrels per day in December, although major oil-consuming countries such as the United States and Japan have put pressure on the organization to speed up the pace of production increases. OPEC+'s decision may prompt the US to release strategic crude oil reserves, but such measures "can only fill the gap caused by temporary production interruptions, and cannot solve structural problems such as insufficient investment and rising demand; continue to recommend investors with higher risk tolerance Increase holdings of longer-term Brent futures contracts, which are currently priced below the spot price.
Goldman Sachs analyst Damien Courvalin said that the global oil market is still under-supply, coupled with OPEC+ and the United States openly dispute the issue of crude oil production, it is expected that oil price volatility will intensify in the next few weeks. In general, maintain a bullish view. If the United States releases its strategic reserves, it may only temporarily ease the pressure on price increases, and it may even be counterproductive next year.
(U.S. Oil Hour Chart)
OPEC+, formed by Saudi Arabia and other OPEC member states and their allies, agreed to stick to the original plan to increase production by 400,000 barrels per day in December. Saudi Arabia has rejected calls for OPEC+ to speed up the increase in oil supply.
Sources from OPEC+ said that if the United States believes that the world economy needs more energy, it has enough capacity to increase production. Saudi Arabia and Russia increasingly believe that higher prices will not prompt a rapid increase in US shale oil production. Saudi Energy Minister Prince Abdulaziz said on Thursday that oil-producing countries are worried about increasing production too quickly and that they are worried about another setback in the fight against the epidemic and economic recovery. Due to the slowdown in consumption, oil inventories will see "huge" growth at the end of 2021 and early 2022.
Russian Deputy Prime Minister Alexander Novak stated that since August, OPEC's supply to the global market has increased by 2 million barrels per day, and will continue to increase by 400,000 barrels per month in the second half of 2021 and early 2022. /Day plan. In October, the EU's oil demand showed some signs of decline. Global oil demand is still affected by the Delta variant virus outbreak.
A White House spokesperson said on Thursday: "At a critical moment in the global economic recovery, OPEC+ seems unwilling to use its existing production capacity and capabilities. The President believes that Americans should have access to affordable energy, including at gas stations, and instructed us to continue. Monitor the market and be prepared to use all tools when needed." The United States is the world's largest oil producer, and its production has fallen sharply in 2020. Since then, the rate of recovery of production has been much slower than expected.
UBS strategist Giovanni Staunovo said in the report that the price of Brent crude oil is expected to reach US$90 per barrel in the next few months. After OPEC+ decides to maintain a cautious increase in production, the market is still undersupply. OPEC and its allies insisted on its plan to increase production by 400,000 barrels per day in December, although major oil-consuming countries such as the United States and Japan have put pressure on the organization to speed up the pace of production increases. OPEC+'s decision may prompt the US to release strategic crude oil reserves, but such measures "can only fill the gap caused by temporary production interruptions, and cannot solve structural problems such as insufficient investment and rising demand; continue to recommend investors with higher risk tolerance Increase holdings of longer-term Brent futures contracts, which are currently priced below the spot price.
Goldman Sachs analyst Damien Courvalin said that the global oil market is still under-supply, coupled with OPEC+ and the United States openly dispute the issue of crude oil production, it is expected that oil price volatility will intensify in the next few weeks. In general, maintain a bullish view. If the United States releases its strategic reserves, it may only temporarily ease the pressure on price increases, and it may even be counterproductive next year.
(U.S. Oil Hour Chart)
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