OPEC Extends Production Cut Expectations and Continued Decline in Inventories, Crude Oil Collectively Shut Down US Government

Original title: OPEC Extends Production Cut Expectations and Continued Decline in Inventories, Crude Oil Collectively Closed

Financial Sector US Equity News Dec 3, Beijing time, as traders bet the OPEC + alliance will extend production cuts until the new year, and US government data showed crude oil inventories nationals fell for the second consecutive week and crude oil futures closed higher.

West Texas Intermediate (WTI) crude oil for January delivery on the New York Mercantile Exchange rose 73 cents, or 1.6%, to close at $ 45.28 a barrel. In trading European futures on the Intercontinental Exchange, the price of Brent crude oil as a global benchmark rose 83 cents to US $ 48.25 per barrel, an increase of nearly 1.8%.

OPEC earlier this week postponed its official production cut meeting for two days until Thursday. It was widely expected that the alliance would postpone plans to ease production restrictions originally planned for next month. Deputy Director of the Energy Information Administration and Chief Correspondent of the Organization of Petroleum Exporting Countries, Amena Baker, said on Twitter Wednesday: “The atmosphere inside OPEC seems to be more diplomatic. They said they will reach a consensus tomorrow. positive”.

While there are concerns that rising outbreaks in the US and Europe will continue to curb demand for crude oil, the postponement of the OPEC meeting has again raised concerns in the market that differences within the alliance may cause expire the delay and therefore increase production from next month.

Tariq Zahir, executive member of Tyche Capital Advisors, said he expects OPEC + to agree to extend the current production cut by three months starting in January. OPEC had previously planned to reduce its daily production to 7.7 million barrels and plans to reduce it by about 2 million barrels in January next year, leading to an increase in oil production on the global market. Zahir said that if a decision is not made, “we could see a sharp drop in crude oil prices” because the new blockade measures and the sharp rise in COVID in the US will reduce energy demand.

Phil Flynn, senior market analyst at The Price Futures Group, said: “News from OPEC + negotiators seems to indicate that the previously suspected extension of the production reduction agreement for another three months looks set to become a reality. “. Phil Flynn said that at the same time, the UK’s approval of the coronavirus vaccine and discussions between House Speaker Pelosi and Treasury Secretary Mnuchin over the epidemic stimulus plan have made prospects for the oil prices “suddenly more optimistic”.

On Wednesday, the US Energy Information Administration announced that US crude oil inventories fell by 700,000 barrels in the week ending November 27, which also boosted oil prices. IHS Markit’s forecast is for a decrease of 1.7 million barrels, but sources say the American Petroleum Institute reported a 4.15 million barrel increase on Tuesday.

Matt Smith, Head of Commodity Research at ClipperData, said that “a small decline in refining activities, as well as an increase in imports and production,” led to “a small decline in crude oil inventories.” However, he said in an email comment that “the implicit drop in demand during the holiday week has led to a sharp rise in gasoline and spirits stocks, making the report bearish overall.

EIA data shows that gasoline supply increased by 3.5 million barrels and distillate stocks increased by 3.2 million barrels. IHS Markit previously predicted that gasoline supply will increase by 2 million barrels and distillate supply will increase by 100,000 barrels. The EIA data also shows crude oil inventories in Cushing, Oklahoma. Production at the US Petroleum Reserve Center fell slightly by 300,000 barrels this week.

Among other exchange-traded energy products, gasoline rose 1.6% to $ 1.2399 per gallon in January, and heating oil rose 1.4% to $ 1.3662 per gallon at January. Natural gas fell 4.44% in January to close at $ 2.78 per million British thermal units. On Thursday, the EIA will announce the weekly supply of natural gas to the United States.

Commerzbank Commodity analyst Eugen Weinberg said the conflicts surrounding OPEC and the burden of production restrictions could be resolved at this meeting. “In other words, other non-oil producing OPEC + countries will be very happy to close the supply gap left by the voluntary” exit “of the alliance.” Weinberg also pointed out that Norway has confirmed that its voluntary production cuts will expire at the end of the year.

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