On Thursday (April 16), U.S. crude oil surged and fell back. It once rose by more than 3% during the day. The current increase has narrowed to 0.15%. It once again fell below the $20 mark and is now at $19.90, an increase of 0.15%.
On Wednesday (April 15), as demand concerns overshadowed OPEC+’s efforts to reduce production, U.S. crude oil fell for four consecutive trading days, hitting an 18-year low of $19.20, while Brent crude oil also hit a record high. Record EIA crude oil inventory data fell more than 5% after the release.
Overnight data showed that U.S. crude oil inventories surged by 19 million barrels last week, the largest weekly increase in history. At the same time, U.S. gasoline consumption fell to a record low, highlighting demand pressure.
At the same time, poor retail sales and industrial output data in the United States overnight also highlighted the downward pressure on the economy, and the market is concerned that as global crude oil inventories approach their limits, this will further pressure oil prices.
Analysts warn that since the production reduction agreement will be carried out in May, oil-producing countries can freely increase production before then, which may further weaken the effect of OPEC+’s production reduction.
However, the IEA believes that as oil price pressure intensifies and producers gradually reduce production, global oil supply may fall below 90 million barrels per day in the next few months, the lowest level since 2011. , which will partially alleviate the pressure of oversupply. At the same time, many countries are increasing crude oil reserves and providing storage space for excess crude oil production, which may partially alleviate the decline in oil prices. In addition, the United States said that despite the agreement reached by OPEC+, oil tariffs have not been completely ruled out, which may also restrict the production behavior of various countries and partially support oil prices.
Overall, oil prices are expected to remain under pressure until crude oil demand rebounds significantly and OPEC+ production declines significantly.
EIA crude oil inventories hit the largest weekly increase in history, U.S. crude oil fell to a new low in 18 years
EIA data released on Wednesday showed that U.S. crude oil inventories surged by 19 million barrels last week, the largest weekly increase in history, as refineries suffered from declining demand due to the epidemic. Reducing refining activities. U.S. refinery capacity utilization was 69% last week, the lowest level since September 2008.
After the data was released, U.S. oil and cloth prices were mixed, with U.S. oil closing slightly higher as it hit an 18-year low earlier in the day and thus partially recovered its losses, while Brent oil fell more than 5%.
Overall, with U.S. fuel demand experiencing a record decline and crude oil inventories experiencing the largest weekly increase in history, oil prices fell to their lowest point in nearly 20 years, with New York crude oil futures settlement prices falling below for the first time since 2002. $20/barrel.
At the same time, according to EIA data, U.S. gasoline consumption fell to a record low, highlighting the pressure of insufficient gasoline consumption as the summer travel season approaches, which may further pressure oil prices.
Concerns about slowing demand continue to offset OPEC+’s efforts to reach a record production reduction agreement. U.S. crude oil prices have fallen for four consecutive trading days.
U.S. retail sales and industrial output data highlight the downward pressure on the economy and also have a negative impact on crude oil demand Damage
Data released on Wednesday showed that U.S. retail sales fell by a record in March and manufacturing output fell by the largest amount since 1946, supporting analysts’ view that due to Extraordinary measures were taken to control the spread of the epidemic, causing the U.S. economy to experience its worst contraction in decades in the first quarter. Retail sales fell by $46.2 billion in just one month in March, nearly matching the $49.1 billion that fell in the 16 months from peak to trough during the Great Recession.
At the same time, data also showed that U.S. factory output in March hit the largest decline since 1946. But April’s survey data looks even worse than March, with both the New York State Manufacturing Index and the U.S. Home Builders Index falling to previously unimaginable levels.
At the same time, the Beige Book report released by the Federal Reserve on Thursday morning Beijing time showed that as economic activity “shrunk sharply in all regions,” U.S. companies have been affected by the epidemic. The Federal Reserve’s latest survey of businesses across the country in March showed that during this period, the United States shifted from worrying about the risks posed by the epidemic to most parts of the country implementing some form of “stay-at-home orders” and tens of millions of people losing their jobs.
The continued economic downturn has intensified the pressure of slowing demand. Pay attention to the number of initial jobless claims during the day. After three consecutive weeks of record levels, the number of unemployed people in the United States has exceeded 16 million in three weeks.
A study by the Federal Reserve Bank of St. Louis shows that there is a close relationship between the GDP growth rate and the unemployment rate in the United States. According to statistics, the economic sectors that have been shut down due to the epidemic in the United States account for 70% of GDP. If the daily increase in unemployment continues to exceed market expectations, it may further hit the U.S. economic outlook, thus putting pressure on oil prices.
International Energy Agency: OPEC+ production cuts will be difficult to offset demand losses in the short term, but production will naturally decline, and oil prices are expected to recover in June
The International Energy Agency (IEA) forecast on Wednesday that oil demand in April is expected to fall by 29 million barrels per day year-on-year to the lowest level in 25 years. The IEA also warned that production cuts by oil-producing countries will not be able to fully offset the impact of the recent decline in demand.
Recently, OPEC+ has cooperated with the United States and other oil-producing countries to reach a consensus on a record-breaking global oil production reduction plan. According to the agreement, OPEC+ will cut production by 9.7 million barrels per day, and another”In the short term, the market remains inundated with misplaced crude,” said Torbjorn Tornqvist, co-founder and CEO. “Spot spreads will continue to be very weak, while spot oil prices will fall sharply.”
Tuesday May WTI futures are trading at a discount of $7.29 a barrel, the largest since 2009 and a clear sign of oversupply. Prices for inland products such as Bakken shale oil remain at $10 a barrel as refiners are stuck with unsold fuel and have to slash prices.
According to oil depot tracking data collected by Bloomberg, Saudi Arabia’s crude oil exports were approximately 9.3 million barrels per day in the first two weeks of April this year. This compares to 6.8 million barrels per day during the same period in March.
“Everything that happened in April has happened,” said Saad Rahim, chief economist at trading giant Trafigura Group. “It’s demand. The pinnacle of disruption. It’s too late to stop the massive amounts of crude oil entering the warehouse. All that needs to be done now is to solve the longer-term problem.”
The United States says that despite the OPEC+ agreement, oil tariffs have not been completely ruled out
A senior U.S. government official said that even after OPEC+ reached the latest supply agreement, the United States will increase oil tariffs. The possibility of import tariffs has not been ruled out either.
Trump has previously threatened to impose tariffs on oil produced by Saudi Arabia and Russia if an agreement is not reached.
Francis Fannon, Assistant Secretary of State for Energy and Resources, said that this option has not been completely ruled out, indicating that the United States wants to ensure that production reduction measures are effectively implemented. Fannon said on the call Wednesday that it’s still an option on the table and it’s certainly something the president has considered, but he’s been saying it’s something he doesn’t think he needs to use. Fannon said the global oil glut will take time to resolve, even after the world’s largest oil producers recently decided to implement unprecedented production cuts. </p
