Saudi Arabia is threatening to launch an oil price war unless other OPEC members make up for production cuts they have failed to comply with, sources said. Saudi Energy Minister Prince Abdulaziz bin Salman is set to issue an “ultimatum” to Angola and Nigeria in recent weeks, requiring them to submit detailed guarantees to curb oil production.
Data released by the U.S. Energy Information Administration (EIA) on Wednesday showed that as of the week of June 26 , U.S. crude oil inventories fell by 7.195 million barrels to 533.5 million barrels, the largest weekly decline in the past six months, and market estimates were for an increase of 73,000 barrels. Crude oil inventories in Cushing, Oklahoma, fell by 2.63 million barrels last week.
International oil prices fell after rising on Wednesday. As of the close, the August contract of WTI crude oil futures closed at US$39.82 per barrel, an increase of 1.40%; the September contract of Brent crude oil futures closed at US$42.03 per barrel, an increase of 1.84%.
On Wednesday evening, the United States announced that the number of ADP jobs in June increased by 2.369 million, the largest increase in history. It is expected to increase by 2.9 million. The previous value was significantly revised from a decrease of 2.76 million to an increase. 3.065 million, an increase of 5.825 million, which is larger than the totals in 2018 and 2019.
The Federal Reserve released the minutes of its June 9-10 policy meeting on Wednesday local time. During its last meeting, the Fed kept interest rates unchanged and held in-depth discussions on capping bond yields and strengthening guidance on future policymaking.
Officials attending the meeting said that “the current monetary policy stance is still appropriate”, but they said that the Federal Reserve should strengthen its guidance to the market. The minutes of the meeting said it was necessary to “implement a highly loose monetary policy for a period of time” and said the conditions for implementing such a policy should be clearly stated.
The COVID-19 epidemic in the United States has accelerated its deterioration, and the number of newly confirmed cases in a single day on Tuesday hit a new high, exceeding 48,000. Fauci, an important member of the White House New Coronavirus Response Task Force and director of the National Institute of Allergy and Infectious Diseases, said on June 30 that the United States is on the wrong path to fighting the epidemic, and new confirmed cases may increase at a rate of 100,000 per day.
Saudi Arabia threatens to launch a new round of oil price war
After experiencing After last week’s correction, international oil prices began a new round of rebound this week. On Wednesday, international oil prices first rose all the way, with the main contracts of Brent crude oil and WTI crude oil expanding to more than 3%, but they soon fell back from their highs. As of the close, the August contract of WTI crude oil futures closed at US$39.82 per barrel, an increase of 1.40%; the September contract of Brent crude oil futures closed at US$42.03 per barrel, an increase of 1.84%.
Saudi Arabia is threatening to launch an oil price war unless other OPEC members make up for their previous failure to comply, sources said Production reduction action. Saudi Energy Minister Prince Abdulaziz bin Salman is set to issue an “ultimatum” to Angola and Nigeria in recent weeks, requiring them to submit detailed guarantees to curb oil production.
Sources pointed out that at the OPEC video conference on June 18, Prince Abdulaziz said that Saudi Arabia would sell crude oil at a discount to suppress Angola and Nigeria.
Data released by the U.S. Energy Information Administration (EIA) on Wednesday showed that U.S. crude oil inventories fell by 7.195 million barrels to 533.5 million barrels in the week ended June 26, the highest level in the past six months. For the largest weekly decline, market estimates were for an increase of 73,000 barrels. Last week, crude oil inventories in Cushing, Oklahoma, decreased by 2.63 million barrels; U.S. refined oil inventories decreased by 593,000 barrels, and the market estimate was for an increase of 163,000 barrels; U.S. gasoline inventories increased by 1.199 million barrels, and the market estimate was for a decrease of 1.524 million barrels. .
Zhong Meiyan, director of the Energy and Chemical Department of Everbright Futures Research Institute, said that international crude oil is currently in a turbulent market. “There is news that Oman’s Ministry of Petroleum will reduce the crude oil quotas delivered to all customers in September, demonstrating the determination of oil-producing countries to fulfill their production reduction commitments. This is the main support for the current bullish market. In addition, the Libyan National Oil Company requires companies to prepare for recovery Oil production is getting ready. This has also triggered supply concerns. Overall, oil prices are currently driven by multiple news and show an oscillating rhythm,” she said.
In the view of Yu Pengsen, an energy researcher at Zhaojin Futures, after two months of production cuts, U.S. production has dropped by 2.3 million barrels per day from its peak. The number of rigs has also declined for 16 consecutive weeks, which has injected strong confidence into the market. “In fact, since the implementation of the OPEC+ production reduction agreement, the international oil market has achieved a complete reversal. The rise is only a matter of time and magnitude. The market outlook still needs to pay attention to the changes in various indicator data in the international oil market.” Yu Pengsen said.
In the domestic market, asphalt futures rose strongly yesterday, attracting market attention. In this regard, Yu Pengsen said that for asphalt, asphalt spot prices have risen recently, but asphalt futures have not started to rise. As of June 30, futures prices have even been lower than spot prices, but the fundamentals of asphalt are good. Factory inventories are 40% lower than the same period last year, and social inventories are also 3% lower than the same period last year. Spot consumption is normal and demand is good.The rally is also very strong.
“The precious metal sector has surged again, mainly because the number of confirmed cases of COVID-19 around the world is still on the rise, and the risk of a second outbreak of the epidemic has increased sharply. Repeated epidemics will be bullish for gold prices in the long term. At the same time, tensions between China and the United States may escalate, and market risk aversion is rising. In addition, global central banks continue to be easing, and the low interest rate environment will also be the main driving force supporting the upward trend of gold prices. At present, the balance sheets of central banks in the United States, Europe, and Japan have all hit new highs. Under the disruption of the epidemic, global central banks may maintain a low interest rate environment for a long time.” Shanshan said that from a financial perspective, gold ETF holdings have reached a new high, and the continuous participation of funds is also an important factor supporting gold prices.
In the view of Wang Jun, a futures analyst at Minmetals Economics, the current market focus is still on the sluggish economy and extremely loose monetary policy under the epidemic. Under the economic downturn, remote inflation expectations have revived, creating an excellent environment for gold and silver to rise. At the same time, the fund bulls who left the market in the early stage have returned, which has also boosted the price of gold and silver to a certain extent. The current net long position held by funds is not high, and it is expected that there will still be room to add positions in the future, which will also continue to push up the price of precious metals. .
“In the future, the precious metal sector will still have upward momentum due to factors such as epidemic disturbances, loose policies, and macroeconomic downturns, but we need to be wary of the risks of a stronger U.S. dollar and lower-than-expected inflation.” From Shanshan said.
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