Original title: us Oil has brushed a new high for more than two and a half years, and OPEC+ is expected to be cautious about loosening and reducing production.
On Thursday (July 1) in European trading, US crude oil futures prices rose to $74.94 a barrel, their highest level since October 10, 2018, while Brent crude oil futures prices rose to $75.88 a barrel since October 31, 2018. Saudi Arabia and Russia have reached a preliminary agreement to increase oil production, sources said.
As of press time, the futures price of US crude oil was down 0.19% at US $73.91 per barrel, while that of Brent crude was at US $75.17 per barrel, down 0.28%.
Saudi Arabia and Russia have reached a preliminary agreement to increase oil production, and OPEC+ sources said the OPEC+ deal could include an increase of less than 500000 b / d a month until December 2021, after OPEC+ was widely expected to increase production by 50-1 million b / d between August and September, two sources said. In addition, OPEC+ may loosen its oil production by about 2 million barrels a day from August to December.
As summer travel increased and more people were vaccinated, US crude oil prices rose more than 10 per cent in June and Brent crude prices rose more than 8 per cent to their highest level since 2018, but amid the spread of highly contagious novel coronavirus, renewed blockades in Asia have limited demand.
Us crude oil inventories fell for the sixth consecutive week last week as demand rose, according to the US Energy Information Administration. Specific data show that EIA crude oil stocks in the United States decreased by 671.8 barrels in the week ending June 25, with an expected decrease of 3.85 million barrels, and the previous value decreased by 7.614 million barrels; EIA refinery stocks decreased by 869000 barrels, expected to increase by 1 million barrels, and the previous value increased by 1.754 million barrels; and EIA gasoline stocks increased by 1.522 million barrels in the week ended June 25, expected to decrease by 900, 000 barrels, and the previous value decreased by 2.93 million barrels.
Crude stocks in Cushing, Oklahoma, where West Texas Intermediate was delivered, fell to their lowest level since March 2020, also supporting the price of US benchmark crude.
Analysts had expected the global supply deficit to widen in the second half of the year as OPEC+ continued to cut production while demand rose. According to a survey conducted by well-known foreign media in June, the average price of Brent crude this year is expected to be $67.48 per barrel, while the average price of WTI crude oil is expected to be $64.54, both higher than the forecast in May.
OPEC+ will increase Nissan from May to JulyThe volume reduction will be relaxed to 2.1 million barrels and a meeting will be held on Thursday to decide whether to keep production unchanged or increase production, possibly by more than 1 million barrels or 500000 barrels.
ANZ analysts said off-site discussions showed that Russia was proposing an increase in supply, while Saudi Arabia wanted a more cautious approach. The resurgence of the Delta variant has raised concerns in the market that the recovery in demand may be hampered.
TD Securities said that even if crude oil inventories fell much more than expected, crude oil prices fell below $73.50 as a result of unexpected surge in gasoline inventories, concerns about the novel coronavirus strain of Delta, and supply uncertainty in oil-producing countries of the Organization of Petroleum Exporting countries and its allies (OPEC+), but oil prices are unlikely to fall or rise until the market hears details of how OPEC will introduce spare capacity into the market. If the oil-producing group restricts supply growth that exceeds current expectations, the US is likely to challenge $80 a barrel.
The bank believes that the sharp drop in U.S. crude oil inventories has helped oil prices stabilize in a very narrow range. Although product demand has increased by 151000 barrels per day, the latest fuel inventory data show that refiners may be ahead of the recovery in demand because they have increased utilization by 0.7%, which is higher than expected. The recent increase in gasoline inventory indicates that there are some stocks before summer demand. But gasoline inventories are starting to look particularly inflated compared to the 2015-2019 average, and there is no shortage of crude oil, because OPEC+ has enough spare capacity to meet demand.
TD Securities expects supply and demand to tighten the environment in the short term, and prices will challenge recent highs. If things go as expected, they will not be surprised that US oil will challenge the $80 / barrel mark. Although there are risks in Delta variants, global demand is likely to surge by about 3 million b / d in the next three months. At the same time, OPEC+ is likely to continue to strictly abide by the rules and how quickly to introduce capped capacity into the growing market. So the resulting deficit, which will eliminate all excess inventories, should have a positive effect on oil prices in the coming months.
According to the latest data from the Chicago Mercantile Exchange Group, open contracts in the crude oil futures market rose for two days on Wednesday and are now up about 24300, with trading volume increasing by about 152800 contracts, ending two consecutive declines.