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The "anti seasonal" slump in demand has led to a significant pullback in international oil prices
2023/10/9
The sharp drop in international oil prices has become the focus of investors' attention during the National Day holiday. On October 4th, the settlement prices of the US WTI crude oil main contract and Brent crude oil main contract both fell by over 5.3%, marking the largest daily decline since September 2022; As of October 6th, the WTI crude oil main contract has fallen by more than 12% compared to September 28th, while the Brent crude oil main contract has fallen by more than 11%. Industry insiders believe that the OPEC+meeting's decision to maintain unchanged production reduction policies, significant accumulation of gasoline inventory, and declining demand have dampened market sentiment, causing a significant decline in crude oil prices. It is expected that the crude oil market in the fourth quarter will be a situation of mixed bullish and bearish factors.
Recently, the commodity market has experienced a chill, and crude oil has wiped out all the gains since early September. On October 4th, international oil prices plummeted by over 5.3% in a single day, with the WTI crude oil main contract closing 5.37% lower at $84.44 per barrel; The Brent crude oil main contract closed 5.31% lower at $86.09 per barrel. As of October 6th, the WTI crude oil main contract was at $82.81 per barrel, a decrease of 12.40% compared to September 28th; The Brent crude oil main contract was at $84.43 per barrel, down 11.16% from September 28th.
On the news, on October 4th local time, the two major oil producing countries, Saudi Arabia and Russia, reiterated their adherence to the current oil production reduction measures until the end of this year. On the same day, the October meeting of the OPEC Joint Ministerial Supervisory Committee decided to maintain the production reduction policy unchanged, and the next meeting is scheduled to be held on November 26th.
In addition, the latest data released by the US Energy Information Administration (EIA) has put pressure on the crude oil market. Data shows that as of the week ending September 29th, the inventory of crude oil in Cushing, Oklahoma was 132000 barrels, with a previous value of -943000 barrels, marking the first increase in crude oil inventory in eight weeks; EIA's gasoline inventory increased by 6.481 million barrels, far exceeding market expectations of 161000 barrels, the largest increase since the week of January 7, 2022.
The low-key conclusion of the OPEC+meeting did not continue to bring new surprises to the market, and investors were somewhat disappointed. That night, EIA data showed that inventory in Cushing, Oklahoma had rebounded, gasoline inventory had significantly accumulated, and the decline in demand continued to dampen market sentiment. Under the release of emotions, oil prices experienced a significant decline. "said Yang An, head of the Haitong Futures Energy and Chemical Research and Development Center.
Natasha Kaneva, head of the global commodity strategy team at JPMorgan Chase, predicts that the demand disruption for crude oil has begun. Compared to the same period in previous years, gasoline consumption in the United States is at its lowest level in 22 years. The price of fuel surged by 30% in the third quarter of this year, leading to a "anti seasonal" slump on the demand side. The phenomenon of "high oil prices suppressing demand" has become particularly evident in the United States, Europe, and some emerging market countries. Even if crude oil prices exceed $90 per barrel in September, the year-end target remains $86.
Regarding the trend of crude oil prices in the fourth quarter, Yang An believes that on the one hand, Saudi Arabia, Russia and other countries are still reducing production, and the supply side is still relatively tight. Crude oil inventories are at historical lows, and changes in the supply side may trigger a shift in market sentiment at any time; On the other hand, during the high oil price stage, investors' concerns about demand have significantly increased, and the latest EIA data shows that not only has gasoline demand in the United States decreased significantly, but inventory has also accumulated significantly. The downward pressure facing the global economy and the final decision of the Federal Reserve to raise interest rates will still have an impact on investors' expectations from a macro perspective, and it is expected that the following will be a situation of mixed long and short factors.
Recently, the commodity market has experienced a chill, and crude oil has wiped out all the gains since early September. On October 4th, international oil prices plummeted by over 5.3% in a single day, with the WTI crude oil main contract closing 5.37% lower at $84.44 per barrel; The Brent crude oil main contract closed 5.31% lower at $86.09 per barrel. As of October 6th, the WTI crude oil main contract was at $82.81 per barrel, a decrease of 12.40% compared to September 28th; The Brent crude oil main contract was at $84.43 per barrel, down 11.16% from September 28th.
On the news, on October 4th local time, the two major oil producing countries, Saudi Arabia and Russia, reiterated their adherence to the current oil production reduction measures until the end of this year. On the same day, the October meeting of the OPEC Joint Ministerial Supervisory Committee decided to maintain the production reduction policy unchanged, and the next meeting is scheduled to be held on November 26th.
In addition, the latest data released by the US Energy Information Administration (EIA) has put pressure on the crude oil market. Data shows that as of the week ending September 29th, the inventory of crude oil in Cushing, Oklahoma was 132000 barrels, with a previous value of -943000 barrels, marking the first increase in crude oil inventory in eight weeks; EIA's gasoline inventory increased by 6.481 million barrels, far exceeding market expectations of 161000 barrels, the largest increase since the week of January 7, 2022.
The low-key conclusion of the OPEC+meeting did not continue to bring new surprises to the market, and investors were somewhat disappointed. That night, EIA data showed that inventory in Cushing, Oklahoma had rebounded, gasoline inventory had significantly accumulated, and the decline in demand continued to dampen market sentiment. Under the release of emotions, oil prices experienced a significant decline. "said Yang An, head of the Haitong Futures Energy and Chemical Research and Development Center.
Natasha Kaneva, head of the global commodity strategy team at JPMorgan Chase, predicts that the demand disruption for crude oil has begun. Compared to the same period in previous years, gasoline consumption in the United States is at its lowest level in 22 years. The price of fuel surged by 30% in the third quarter of this year, leading to a "anti seasonal" slump on the demand side. The phenomenon of "high oil prices suppressing demand" has become particularly evident in the United States, Europe, and some emerging market countries. Even if crude oil prices exceed $90 per barrel in September, the year-end target remains $86.
Regarding the trend of crude oil prices in the fourth quarter, Yang An believes that on the one hand, Saudi Arabia, Russia and other countries are still reducing production, and the supply side is still relatively tight. Crude oil inventories are at historical lows, and changes in the supply side may trigger a shift in market sentiment at any time; On the other hand, during the high oil price stage, investors' concerns about demand have significantly increased, and the latest EIA data shows that not only has gasoline demand in the United States decreased significantly, but inventory has also accumulated significantly. The downward pressure facing the global economy and the final decision of the Federal Reserve to raise interest rates will still have an impact on investors' expectations from a macro perspective, and it is expected that the following will be a situation of mixed long and short factors.
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