Crude oil trading reminder: Asia ensures adequate supply in winter, the White House has concerns about high oil prices to limit the increase, waiting for OPEC+ meeting

During the Asian session on Friday (October 1), oil prices hovered around 75.45. Oil prices closed up nearly 10% in September. The last trading day was turbulent. U.S. oil fell 0.3% and Bursa oil fell 0.2%; news came out of the session. It is said that Asian powers have ordered the country's largest state-owned energy companies to ensure supply this winter, while the White House reiterated its concerns about price increases, offsetting the unexpected rise in US crude oil inventories and the price pressure caused by the strengthening of the US dollar.



In the day, focus on the annual rate of the PCE price index in the United States in August, the final value of the Markit manufacturing PMI in September in the United States, the final value of the University of Michigan consumer confidence index in September in the United States, and the Federal Reserve Hack’s speech; the United States will be announced at 1:00 on Saturday as of October 1 The total number of drilling rigs in the United States that week, the Federal Reserve Meester spoke.

Negative factors affecting oil prices

[U.S. crude oil production increased to 11.307 million barrels per day in July]

The U.S. Energy Information Administration (EIA) stated in its monthly report that U.S. crude oil production increased by 31,000 barrels per day in July to 11.307 million barrels per day, which was higher than the revised 11.276 million barrels per day in June.

The report said that the increase in US crude oil production was due to increased production in Texas and the Gulf of Mexico. In July, offshore oil production in the Gulf of Mexico increased by 56,000 barrels per day, and Texas crude oil production increased by 28,000 barrels per day.

According to the report, the US gasoline demand in July was 9.313 million barrels per day, and the demand for distillate oil, including diesel, was 3.658 million barrels per day.

[US stocks hit the biggest monthly decline since March last year]

High volatility continues to stir up risky assets, and the US stock market recorded its biggest monthly decline since March 2020 in September. The S&P 500 Index fell 1.2% on Thursday, after a cumulative decline of 4.8% in September.

US President Biden signed the interim appropriations bill to provide the federal government with operating funds until December 3. For traders, this is just one of a series of risks in the market. Investors are also preparing for the Fed to cut monetary stimulus measures. At the same time, the market is increasingly worried about slowing economic growth, high inflation, supply chain bottlenecks, tight global energy supplies, and regulatory risks from Asia.

The political dispute in Washington poses a threat of default to the United States and may force President Joe Biden to reduce his massive spending plan; Democratic Senator Joe Manchin hopes to cut Biden’s social spending plan by more than half to $1.5 trillion ; House Speaker Nancy Pelosi has been pushing for votes on the bipartisan infrastructure bill, but progressive Democrats say they have enough votes to prevent the bill from passing unless the Senate agrees on a broader tax and spending plan.

[The number of first-time jobless claims in the United States has unexpectedly increased for three consecutive weeks]

Last week, the number of first-time jobless claims in the United States unexpectedly rose for the third consecutive week, which may reflect the deterioration of labor market conditions and the high volatility of this weekly data.

According to data released by the US Department of Labor on Thursday, as of the week of September 25, the number of people applying for unemployment benefits for the first time increased to 362,000. Among the states, the number of applications in California has surged again. The median forecast of economists surveyed by Bloomberg was that the number fell to 330,000. As of the week of September 18, the number of people who continued to apply for unemployment benefits dropped to 2.8 million.

The rise in the number of first-time jobless claims may highlight the fluctuations in the weekly data, as employers are eager to hire more employees and be able to retain existing staff. However, the number of people applying for unemployment benefits for the first time is still hovering near the low point since the epidemic. The last time the data rose for three consecutive weeks was in April 2020, but the increase at that time was significantly greater.

[The White House is concerned about high oil prices]

White House spokesman Psaki said on Thursday that US National Security Adviser Jake Sullivan had planned to discuss the issue of high oil prices during a meeting with Saudi Arabia’s Crown Prince Mohammed bin Salman earlier this week.

Psaki said, "Obviously, oil prices are worrying. We have been in contact with OPEC. I believe this issue would have been raised, but apart from that, I have no chance to get news."

Royal Bank of Canada analyst Helima Croft said in the report that, given that oil prices are at a high level for several years, we believe that Washington will step up efforts to pressure OPEC to increase production. We believe that an increase of more than 400,000 barrels per day is a viable option on Monday. At the very least, we can expect that if market conditions tighten significantly, the leadership will hint that they are willing to increase the supply of more crude oil. OPEC+ will hold a meeting on October 4 and evaluate plans to further increase output by 400,000 barrels per day.

[OPEC+ may consider the option of releasing more crude oil to the market next week]

According to sources, the Organization of Petroleum Exporting Countries and the oil-producing allies (OPEC+) will consider other options in addition to the existing agreement to increase production by 400,000 barrels a day when they meet next week to deal with oil prices approaching three-year highs and consumer country requirements. Increase supply pressure.

Four OPEC+ sources said that it is possible to further increase oil production, but no one gave a specific amount or specific month. Another OPEC+ source said that there may be an increase of 800,000 barrels per day in the next month, and there may be no increase in production in the next month. Since the OPEC+ last meeting decided on the October output, the fastest month to increase production is November.

Another source said, "We cannot rule out any options," the oil market may need more oil than the existing agreement, which is "one of the possible scenarios."

Sources said on Wednesday that the most likely outcome is that the organization will stick to existing plans. It is still unclear what caused this change in tone, but before that, the OPEC+ Joint Technical Committee (JTC) held a meeting to assess the market prospects, and it is expected that under its basic scenario forecast, the oil market will appear 140 next year. The surplus of 10,000 barrels per day is slightly lower than the previously predicted surplus of 1.6 million barrels per day.

Prior to the OPEC+ online meeting on October 4, negotiations between member states continued, and there was no guarantee that they would agree to additional production increases.

Factors affecting oil prices

[Energy shortage drives oil prices to record the biggest monthly increase since June]

Oil prices closed up nearly 10% in September, and the last trading day was turbulent. There was news that Asian powers had ordered the largest domestic state-owned energy companies to ensure supply this winter. The U.S. Bureau of Economic Analysis stated that GDP rose by 6.3% in the previous quarter. The 59 economists’ forecast for the second quarter GDP ranged from a 6.5% increase to a 7% increase.

Personal consumption increased by 12% in the second quarter, 11.4% in the previous quarter, GDP price index in the second quarter increased by 6.1%, and 4.3% in the previous quarter. The core personal consumption expenditure price index in the second quarter increased by 6.1% compared with the previous quarter. , An increase of 2.7% in the previous quarter.

[British fuel crisis intensifies]

The fuel crisis caused by the “employment shortage” of British truck drivers has intensified, spreading to many fields. Although the authorities urged people to stay calm, panic grabs for fuel were still occurring in various parts of the UK due to fuel problems. Many British people have to wait a few hours to refuel. In North London, some people even fight when queuing to refuel. People were also photographed hoarding oil in barrels with trash bags. Reports stated that this is a very dangerous and illegal act.

According to the British "Daily Mail" report, the fuel crisis has spread to many fields such as education, medical care, and public services. Industry insiders in the fuel sector warned that the impact of the fuel crisis in London may last for a month. Industry sources told The Times that as gas stations take time to replenish, even if the panic purchase subsides, the fuel interruption may continue for several weeks.



On the whole, the global energy crisis has boosted oil prices, but the White House’s concerns about high oil prices and major Asian countries’ commitment to adequate winter supplies have restricted oil price increases. Expectations for increased production at the OPEC+ meeting next week also limit oil price increases. Oil prices are under concern. Weekly OPEC+ meeting. In addition, as the weekend approaches, we will pay attention to whether the White House has any further comments on oil prices.
GMT+8 8:14, US crude oil is now quoted at $75.45/barrel.