Participants indicated that OPEC+agreed to increase its daily output by 654.38 million barrels in September. The meeting held that insufficient long-term investment led to low idle capacity; We must use spare capacity which is severely limited carefully. It is reported that OPEC+will hold its next meeting on September 5th.
It is reported that OPEC+Alliance agreed in September to increase the daily output by 654.38 million+barrels, which is the smallest increase in the history of the organization. Accordingly, OPEC+had previously agreed to increase its daily output by more than 600,000 barrels in July and August.
Affected by the news of the smallest increase in production in history, the international benchmark Brent crude oil and WTI crude oil immediately rose by more than 1%.
Shortly afterwards, us energy information administration (EIA) released the data of crude oil inventory changes in the week of July 29th. The data shows that the US commercial crude oil inventory in the week of July 29th was 426.6 million barrels, an increase of 4.467 million barrels from the previous month and an expected decrease of 6.5438+0.5 million barrels.
In addition, in the week of July 29th, the United States imported crude oil1180,000 barrels per day, a record high since July 2020. The average demand for gasoline in the United States dropped to 8.59 million barrels per day, the lowest since February.
The data released by EIA triggered the warming of market worries. Brent crude oil and WTI crude oil, the international benchmarks, plummeted immediately and staged a big face-changing market. At the close, the international benchmark Brent crude oil and WTI crude oil fell by 2.72% and 3. 1% respectively.
The picture shows the daily performance of WTI crude oil.
Affected by the sudden diving of crude oil last night, many varieties in the domestic commodity market turned down halfway, and the overall market fell more and rose less, showing a bleak performance. Up to the close, there were 25 varieties with a drop of more than 1%, among which iron ore, coking coal, coke, crude oil and pulp dropped by more than 2%, and only a few varieties such as Hu Xin and asphalt closed up slightly.
Demand cooled, and crude oil led the decline in commodities.
Recently, the performance of crude oil is weaker than other industrial products such as copper and steel. In the overall rebound of early commodities, crude oil showed a weak oscillation pattern. An Yang, director of energy and chemical research in haitong futures, said that the upward momentum of crude oil gradually faded, and the very strong monthly difference structure of international oil prices continued to weaken under the background of tight supply in the early stage. Once the supply and demand situation shows signs of further deterioration in the later period, oil prices are likely to lead the decline of commodities.
An Yang believes that the weakening of oil prices is directly related to the decline in demand in European and American markets. The cooling of the demand side led to a sharp drop in the price of refined oil. At present, the profit of refined oil cracking in European and American markets has fallen sharply from a high level. The high inflationary pressure in Europe and America forced countries to raise interest rates one after another. At the same time, the downward pressure on the economy gradually increased, which began to affect the demand for crude oil. The latest EIA data has lowered the forecast of crude oil demand growth from 3.6 million barrels per day at the beginning of the year to 2.2 million barrels per day.
Zheng, an energy researcher at Haizheng Futures, believes that after Biden visited the Middle East in mid-July, Saudi Arabia and the United States did not immediately announce an increase in crude oil production. From mid-July to the announcement of this meeting, there was great uncertainty, and the output of superimposed Libyan crude oil gradually increased to 6.5438+0.2 million barrels per day, which led to the weak oil price oscillation in the early stage.
At present, the long and short factors affecting the crude oil market are changing, and the macro-level influence on oil prices is increasing. The pressure of economic recession and the tightening of liquidity to control inflation are bad for commodity markets including crude oil, and the demand side of crude oil market is not as good as expected, further dragging down oil prices. An Yang said.
The space for OPEC+to increase production in the future is relatively limited.
The meeting of the Organization of Petroleum Exporting Countries has attracted great attention from the market. An Yang said, on the one hand, August was the first time that the new Kuwaiti Secretary-General of the Organization of Petroleum Exporting Countries took up his duties; On the other hand, the final output decision of OPEC+is the focus of the market. At present, oil prices are in a very critical position. The production decision of OPEC+has a great influence on oil prices. The demand side of the crude oil market is weaker than expected. OPEC+is relatively cautious in increasing production. However, considering the demand and efforts of consumer countries such as the United States, OPEC+may need to increase production to meet the demand. But it is also an important factor for oil exporting countries to maintain relatively reasonable prices. So they should reduce the pressure on oil prices as much as possible while increasing production.
OPEC+reached a resolution in September to increase the daily output by more than 654.38 million barrels. An Yang said that compared with the previous regular increase of 400,000 barrels per day, the market can easily absorb this increase.
Jin Yunli, a crude oil researcher at Chuangyuan Futures, said that OPEC+decided to start increasing production by 65,438+10,000 barrels per day in September, and the increase was limited, which was of little significance to alleviating the tight supply. According to the production reduction plan for 2020, by the end of August this year, OPEC+should theoretically make up the production reduction quota of 9.7 million barrels per day, so that the output will return to the benchmark of 45.485 million barrels per day. However, judging from the implementation of production reduction so far, there is still a gap of more than 2 million barrels per day between OPEC+and the benchmark. Excluding the impact of sanctions against Russia, the daily output of other countries is also 6.5438+0 million barrels behind.
An Weizi, senior analyst of Nenghua of Zhengdong Derivatives Research Institute, said that OPEC+agreed to increase production by 654.38 million barrels per day in September, which will be distributed among member countries in proportion. It is expected that the symbolic significance of OPEC+decision is greater than the actual production increase effect, which is in line with previous market expectations. Due to the weak demand outlook, OPEC+is cautious about releasing limited idle capacity, despite the constant external pressure from the United States to increase production before the meeting.
From the perspective of increasing production capacity, An Weizi believes that the effective idle capacity of OPEC+continues to decline, and most countries have already experienced bottlenecks in increasing production. Saudi Arabia and the United Arab Emirates are the few countries in the alliance that still have a certain scale of idle capacity, and the total nominal idle capacity is expected to be close to 2.5 million barrels per day. The relatively limited idle production capacity has also increased the difficulty for the two countries to increase production rapidly in the short term. From the perspective of maintaining alliance unity, it is unlikely that a single country will significantly increase production without other allies. The results of this meeting further clarified that OPEC+has relatively limited room for increasing production in the future, and it is more likely to maintain a gradual and flexible release of excess idle capacity.
Liu Shunchang, an energy and chemical analyst in nanhua futures, said that the output growth in September was significantly lower than that in July and August, reaching 648,000 barrels per day. In the short term, OPEC+production is less than expected, which is good for oil prices, but it will not be very high, because this OPEC+meeting only decided the production policy in September, and the output in June and the following months will have to wait. In addition, we need to pay attention to whether the United States will respond accordingly, especially in mid-July, when US President Biden will visit the Middle East.
Chen Tong, a senior analyst of Yide Futures, said that OPEC+'s plan to increase production was significantly lower than market expectations. On the one hand, this reflects that the recent sharp drop in crude oil prices has made oil-producing countries more cautious. On the other hand, it also shows that the availability of spare capacity of the Organization of Petroleum Exporting Countries is very limited.
The crude oil market is in a pattern of strong reality but weak expectation. Chen Tong said that at the macro level, the aggressive austerity policies adopted by major western central banks have restricted economic activities, and the expectation of global economic recession has been heating up continuously. European governments have also relaxed restrictions on Russian oil trade. On the supply and demand side, as the growth rate of oil demand began to slow down, the output of North America and OPEC+gradually returned, and it is expected that the gap between supply and demand will narrow in the fourth quarter.
Dong Dandan, chief energy analyst of CITIC Jiantou Futures, said that the limited increase in OPEC+production highlights the fact that it is still difficult to significantly increase the global crude oil supply for the time being. Russia is deeply involved in the Russian-Ukrainian conflict, and the United States has been slow to increase shale oil production due to supply chain problems. The only ones that are highly anticipated by the market are Saudi Arabia and the United Arab Emirates of the Organization of Petroleum Exporting Countries. The meeting announced an increase of only 65,438+10,000 barrels per day, rekindling market concerns about supply.
Analyst: Not optimistic in the medium and long term
For the market outlook, Dong Dandan thinks that crude oil as a whole should be treated as an oscillating idea. Taking WTI as an example, 90mdash 1 10 USD may be the oscillation range in the next few months. The biggest resistance to the upward trend of crude oil comes from the macroeconomic downturn. In July, the German PMI fell below the 50 mark, and the US PMI was the lowest since July 2020, close to the threshold. The increment of crude oil supply is limited, and whether crude oil goes down or not depends on the speed and extent of demand decline.
An Yang said that OPEC+finally decided to increase production by 654.38+10,000 barrels per day, which to some extent alleviated the downside risk of oil price breakage in critical situations. At present, the oil price is supported by the sideways continuous callback near the lower edge of the high range, which is relatively weak in form. If the supply side puts pressure on the oil price again, it is likely to usher in the last straw to crush the oil price, leading to the oil price going out of the downtrend. This supply-side action, on the one hand, is in response to the call of the United States to increase production, but in essence it is more an attempt to delay the weakening of oil prices. On the whole, the oil price in the market outlook is still under the pressure of macro-level and less than expected demand, and it is still not optimistic in the medium and long term, and the downward probability of oil price center of gravity is too large.
Yan Lili, a crude oil analyst at Xinhu Futures, said that at present, with the global economic downturn, the demand for petroleum products is under pressure, and the United States has entered the second half of the peak season of gasoline consumption, so it is difficult for consumption to increase substantially. Affected by epidemic situation and high temperature, China's consumption is relatively average. India enters the off-season of consumption. On the supply side, Libya's output has returned to the previous level, that is, 654.38+200,000 barrels per day. The growth rate of shale oil in the United States is slow, but the growth of OPEC+is limited. Russia's crude oil output in July was 6.5438+0.76 million barrels per day, but there is still some uncertainty in the later period. The monthly difference is weakened, the cracking spread is weakened, the oil price fluctuates greatly, and the center of gravity moves down.
Zheng said that the US non-farm payrolls data will be released on Friday, and the US CPI will be released next Wednesday. At present, inflationary pressure is relatively high. If CPI continues to grow substantially and the job market remains strong, the possibility of the Fed raising interest rates in September will increase. Recently, according to CMEFEDWATCH, although the probability of the Fed raising interest rates by 50 basis points in September is still high, the probability of 75 basis points is rising slightly. Under the expectation of interest rate increase and economic recession, the demand for crude oil is expected to weaken.
In the short term, Zheng believes that the small increase in production will continue, the demand toughness still exists, and the inventory is at a low level, which has certain support for oil prices. In the medium and long term, the Federal Reserve sharply raised interest rates to curb inflation, the risk of economic recession increased, demand weakened, the contradiction of refined oil products eased, and the center of gravity of crude oil prices gradually moved down. After entering the fourth quarter, we need to consider whether the energy crisis caused by the Russian-Ukrainian conflict and natural gas will repeat itself.
Jin Yunli said that on the whole, the expectation of economic recession will continue to be disturbed, and the weakening of manufacturing PMI data will put pressure on the demand prospect of the oil industry. Recently, the spread between near and far months has narrowed, and the rebound of oil prices may be limited. Later, we pay attention to the turning point of term structure and the emergence of the inflection point of crude oil inventory in the United States. Oil prices are expected to remain volatile.
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