Brief review of crude oil

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Technical rebound: European and American crude oil futures rise slightly 2015-10-23 07:33 1. Market attention is focused on the decline in U.S. gasoline inventories. 2. Rising U.S. stock markets provide support for the oil market. 3. Analysts believe the price rebound is temporary. Despite a significant increase in U.S. crude oil inventories, traders are focusing on the decline in gasoline and distillate oil inventories; as a result, European and American crude oil futures rose significantly during trading hours, with U.S. benchmark crude oil futures exceeding $46 per barrel at one point. However, the strengthening of the dollar curbed further increases in oil prices. On Thursday (October 22), the closing price of December 2015 West Texas Light Oil futures on the New York Mercantile Exchange was $45.38 per barrel, up $0.18 from the previous trading day, with a trading range of $44.9–$46.10 ； The closing price of Brent crude oil futures on the London Intercontinental Exchange for December 2015 was $48.08 per barrel, up $0.23 from the previous trading day, with a trading range of $47.65–$48.73. The settlement price of December Brent crude futures was 2.7 dollars per barrel higher than that of West Texas Light crude futures for the same period, an increase of 5 cents from Wednesday. The rise in the stock market has also boosted the atmosphere in the oil market. U.S. stock markets closed higher on Thursday, with the S&P 500 rising 33.57 points, or 1.7%. The NASDAQ Composite Index rose by 79.93 points, or 1.65%. The Dow Jones Index rose by 320.55 points, or 1.9%, reaching its highest closing level in over two months. U.S. crude oil production remained unchanged from the previous week, but it was 500,000 to 600,000 barrels per day lower than at its peak in April. Analysts believe this is because the production costs of shale oil in the U.S. are now similar to current oil prices. However, consulting firm PVM stated in a report that oil prices will not rise in the near term, and any increase would be temporary, as higher oil prices would once again encourage non-OPEC producers to increase their output. Supply elasticity, and the concerns surrounding it, have changed the landscape of the oil market. The cycles of rise and fall in commodity prices may not yet be over, but as far as oil is concerned, the situation in the future will not be as severe nor last as long as it used to, unless geopolitical events threaten an important oil-producing country. The OPEC+ meeting sought ways to prevent further drops in oil prices, but the world’s two largest oil producers, Saudi Arabia and Russia, are both unwilling to cut production. Reuters believes that the increase in OPEC’s daily crude oil production in September was mainly due to the resumption of crude oil exports from northern Iraq following a disruption. Crude oil production in Saudi Arabia and other OPEC members in the Gulf region remains roughly stable. It further suggests that OPEC members are focused on continuing to protect their market shares rather than caring about oil prices. Data from Reuters’ survey show that OPEC’s daily crude oil production was 31.68 million barrels in September, while the revised figure for August was 31.57 million barrels. OPEC’s daily crude oil production is almost 1.5 million barrels higher than the target level set by OPEC in November 2014, when it decided to maintain the market production quotas unchanged. Due to an oversupply in the market, oil prices have almost halved over the past year. In September, the daily crude oil production of OPEC’s two member countries in West Africa increased slightly. Nigeria’s crude oil exports increased further in October. Iran’s crude oil production increased slightly in September ； Qatar’s daily crude oil production has decreased ； Kuwait’s crude oil production remains stable ； Increased crude oil production in the UAE ； Saudi Arabia’s crude oil production remains stable, remaining close to the record high of 10.56 million barrels per day set in June. Libya’s daily crude oil production has decreased slightly. OPEC production is higher than this amount. The International Energy Agency estimates that OPEC will supply 31.72 million barrels of crude oil per day in September, an increase of 90,000 barrels per day compared to the previous month, and it is expected that OPEC’s crude oil production will continue to rise. In 2014, OPEC, led by Saudi Arabia, abandoned its long-standing strategy of using production cuts to support oil prices, and decided to maintain its market share in order to compete with producers with higher costs. The International Energy Agency states that since Saudi Arabia shows no inclination to abandon its strategy of defending its market share, and Iraq intends to maintain its current record-level crude oil production, OPEC’s overall supply is expected to remain around 31.5 million barrels per day in the coming months. The International Energy Agency believes that global capital expenditure in the upstream sector has decreased by more than 20%, affecting both new projects and existing production operations. It predicts that total daily crude oil production in non-OPEC countries will fall by nearly 500,000 barrels per day next year. However, due to weak demand prospects, the agency estimates that the average daily demand for OPEC’s crude oil production at 31.1 million barrels per day is 200,000 barrels lower than the figure predicted in the previous report.