Recently, the supply side of the international crude oil market has continued to tighten. At the same time, as some countries have moderately “unblocked” and begun to resume work and production, crude oil demand has shown signs of recovery. Analysts believe that supply and demand in the international crude oil market are tending to be balanced, which will help boost market confidence and support the stability of international oil prices in the short term.
The recent sustained slight increase in international oil prices highlights the gradual recovery of the crude oil market since the beginning of May. As of the close of trading on the 22nd, the price of light crude oil futures for July delivery on the New York Mercantile Exchange rose by $0.71 to close at $40.46 per barrel, an increase of 1.79%. The price of London Brent crude oil futures for August delivery rose 0.89 US dollars to close at 43.08 US dollars per barrel, an increase of 2.11%.
Analysts believe that crude oil market demand The epidemic is gradually recovering, and the relaxation of epidemic control measures in many countries may continue to support oil demand in the second half of the year. The International Energy Agency recently released its monthly oil market report, raising its forecast for global average daily oil demand this year by 500,000 barrels to 91.7 million barrels. This is the second consecutive month that the agency has raised its demand forecast.
The Organization of the Petroleum Exporting Countries (OPEC) and its partner countries have recently been committed to actively promoting fair production reductions, and their determination to resolutely abide by the production reduction agreement has become increasingly obvious. OPEC recently announced that the implementation rate of the production reduction agreement in May was 87%, and agreed on a compensation plan for countries that failed to meet the production reduction target in the first few months of the production reduction agreement.
The meeting emphasized that 100% implementation rate of production reduction is not only related to fairness, but also crucial to the current market rebalancing, which will contribute to the continued stability of the oil market. Iraq and Kazakhstan have submitted plans to make up for the gap in previous production cuts in the third quarter.
Saudi Arabia’s Energy Minister Abdulaziz bin Salman said that OPEC and non-OPEC oil-producing countries have moved towards the right direction of rebalancing supply and demand in the global oil market. track, but there is still a long way to go. Many countries have begun to relax daily epidemic prevention and control measures, and we can see signs of a rebound in oil demand and market rebalancing. But he also warned that there are still risks and the possibility of reversal in the current situation.
Analysts noted that data showed that Saudi Arabia’s crude oil exports to the United States fell significantly in June from before. If Saudi exports remain sluggish in the second half of June, U.S. crude oil imports from Saudi Arabia will fall to the lowest level in 35 years.
The Saudi oil ministry hinted that the kingdom is unlikely to increase crude oil exports to the United States from late June to July because less crude oil from Saudi Arabia may reduce U.S. crude oil inventories, which in turn will Push up international oil prices.
Saudi Arabia’s oil supply to Asia has also shrunk. Saudi Arabian oil department officials revealed that due to insufficient refinery operation, the country has significantly reduced oil supply to major Asian customers in July, with supply falling by up to 40%.
Edward Bell, a commodity analyst at the National Bank of Dubai in the United Arab Emirates, believes that the implementation of production cuts in the next two weeks is crucial to the market. As the implementation of production cuts strengthens, international oil prices may achieve Short term stability. However, as there is still great uncertainty in the subsequent development of the epidemic, which will further affect the demand side of the oil market, it is still difficult to judge the long-term trend of international oil prices.
The International Energy Agency report believes that since this year, the production reduction agreement and the G20 Energy Ministers’ Meeting have made great contributions to the restoration of supply and demand order in the global oil market. If the recent production cuts can be maintained and demand gradually picks up, international oil prices will be supported to become more stable in the second half of the year, but uncertainty remains. </p
