Source: Zhitong Finance Author: Rousseau
US WTI crude oil futures rose above $75 per barrel, while Brent crude oil surpassed $80 per barrel.
The international crude oil price benchmark, the Brent crude oil futures price rose to its highest point in nearly a month on Thursday. Previously, the decline in US inventories far exceeded expectations (official data showed that US crude oil inventories fell sharply by 9.233 million barrels last week, far exceeding market expectations of 2.15 million barrels), while demand expectations in the Asian market have also recovered. In Thursday's intraday crude oil price trading, the North American crude oil price benchmark WTI crude oil futures price reached its highest level since December 26, climbing above $75 per barrel, while the price of Brent crude oil has already broken through $81, also hitting a new high in a month.
In terms of the latest crude oil inventory data, the US EIA inventory statistics as of last week show that crude oil inventories in the US, the world's major crude oil producer, fell by more than 9 million barrels, more than six times what the market expected, reaching the lowest level since October last year. Meanwhile, in China, a country with large demand for crude oil, the government said it will lower the bank reserve ratio within two weeks, and hinted that more supportive economic policies may be introduced. This trend will help the energy consumption prospects of the world's largest crude oil importer. Japan and South Korea may also increase the scale of imports of crude oil, a traditional energy source in the winter.
It has been difficult for international crude oil prices to break through a narrow range until this month, mainly due to traders' concerns that crude oil supply growth from non-OPEC oil producers will remain strong, offsetting the impact of geopolitical tension in the Red Sea disrupting global crude oil trade. However, as the US Navy intercepted an attack on two container ships by Iranian-backed Houthi rebels in Yemen, this is a reminder that geopolitical risks in the Middle East region are rising and may affect more Middle Eastern countries.
Market strategist Charu Chanana from Saxo Capital Markets said: “Given the recent unusually cold weather affecting production, the decline in US EIA inventories is likely an anomaly. However, supply from non-OPEC countries continues to offset concerns about the Middle East, which indicates that crude oil prices may continue to fluctuate in a range until the outlook for global economic growth becomes more clear.”
In recent months, with the conflict between the Palestinian Hamas organization and Israel falling into a tug-of-war, and Iran usually using proxies to increase its influence, the US has continued to air attack the Houthis in retaliation for attacking US merchant ships. Multiple tensions in various parts of the Middle East have tested the nerves of crude oil traders. The US military has been active in the Red Sea and has attacked a number of Iraqi militias supported by Iran.
Wall Street bank Citigroup recently warned that if the tension in the Middle East escalates, the price of Brent crude oil may “soar” to 90 US dollars per barrel, but the major commercial bank warned that this is not its basic forecast range.
Furthermore, the WTI crude oil contract's spot spread (the difference between the two closest contracts) has been extended to the usual “spot premium” range of 12 cents per barrel, which is a bullish structure. In contrast, just the opposite two weeks ago, the “futures premium” of the WTI crude oil contract was as high as 7 cents.
Vicki Hollub, CEO of US oil and gas giant Occidental Petroleum (OXY.US), said at the World Economic Forum held in Davos, Switzerland on Tuesday local time that if global oil exploration activities continue to fail to keep up with market demand, the global oil market may face a sharp shortage of oil supply starting in 2025.
The CEO explained that from the mid-1950s to the end of the 70s, the amount of oil discovered by global oil companies was about 5 times the amount of fuel consumed, but by 2023, that proportion had steadily declined to only about 25%. As a result, Hollub warned that the oil market will completely shift from a short-term oversupply situation to a long-term shortage of oil supply where the world needs more oil.
edit/lambor