Judging from the trend of WTI oil price, supported by major favorable factors such as OPEC+continuing to cut production and European and American countries continuing to relax epidemic control to boost demand prospects, international oil prices showed an overall upward trend in May.
At the beginning of May, influenced by the endorsement of the Organization of Petroleum Exporting Countries and the production reduction agreement, non-OPEC oil producers began to cut production on a large scale to boost the oil market atmosphere. In addition, some independent oil refining companies in the United States also claimed that crude oil futures in Europe and the United States rose due to production cuts, but market demand remained weak, which restrained the rise of international oil prices to some extent.
By mid-May, the international crude oil market was still worried about the sluggish demand for oil because Saudi Arabia and other oil-producing countries claimed to increase production cuts, and the international oil price did not change much.
In late May, oil prices began to show an upward trend. Brent crude oil futures closed lower, fearing that the reduction in production was not as strong as the sudden drop in demand, which led to a sharp intraday oscillation in international oil prices. However, there are signs of a decline in crude oil inventories in the United States, with surplus production capacity and an upward trend in gasoline demand. US crude oil rose for the fourth consecutive trading day. By the end of the month, despite the increase in US crude oil inventories, US gasoline demand increased, Cushing crude oil inventories continued to decrease significantly, US crude oil production continued to decline, and international oil prices fluctuated.
At present, there is no difference between Saudi Arabia and OPEC leader Russia, and the result of cooperation is unbelievable. In the first month of implementation, most of the 20 oil-producing countries that signed the OPEC production reduction agreement performed unexpectedly well. This may be a sign of despair when the price of crude oil falls to negative value, or it may reflect the difficulty of selling oil in a world where demand collapses.
As economic forces push oil-producing countries to reduce production, oil-producing countries outside the agreement also play a role. The strength of these measures is amazing. Crude oil production in the United States is declining. The data shows that the oil production in the United States has decreased by 654.38+0.6 million barrels per day or 654.38+0.2% in two months. Oil production in Alberta, Canada has dropped by a quarter, that is, by 1 10,000 barrels per day.
But they need to be cautious about the amount of oil production cuts. Although the current situation has improved, the temptation to increase production is too great, but the rebound in oil prices should not be regarded as a license to turn on the tap. In early May, after consultation, Saudi Arabia and its neighbors unanimously decided to further reduce production in June. Further production cuts may lead to a decrease of 6.5438+0.2 million barrels of oil per day in the market, and reduce Saudi Arabia's oil production to 7.5 million barrels per day next month, which is the lowest level in 20 years, unless the Saudi oil processing plant was attacked last year.
Ignorant production cuts are harmful to the national economy, so some oil-producing countries in the Organization of Petroleum Exporting Countries (such as Russia) are still eager to abide by the agreement they reached in April and start increasing production again in early July. One of the challenges facing the Organization of Petroleum Exporting Countries is that it has every right to do so. The agreement they reached through hard negotiations contains a "sunset clause" that allows participants to start relaxing production cuts in July. If they do this, it may lead to the rapid recovery of 2-4 million barrels of oil supply every day.
One idea put forward by some of them is to revise the April agreement and extend the production target from May to June until the end of the year. However, the idea of extending the production reduction time has not been recognized by Russia.
But there are signs that Saudi Arabia and Russia seem to be trying to avoid another conflict. Last week, in a telephone conversation between Russian President Vladimir Putin and Saudi Crown Prince, the two countries agreed to coordinate closely. I guess, with the joint efforts of OPEC and non-OPEC oil-producing countries, it is just around the corner that oil prices will rise to the day before.