Crude oil: OPEC cuts oil demand growth forecast, oil prices tumbled more than 4%

At the beginning of the Asian market on Tuesday, November 15, U.
S.
oil traded around $85.
31 per barrel; Oil prices fell more than 4 percent on Monday, dragged down by a stronger dollar, rising pandemic fears and OPEC's fifth cut forecast for oil demand growth this year since April, and further cut its growth forecast
for next year.

During the day, we will focus on the US PPI annual rate in October, the release of the monthly crude oil market report by the IEA, and the G20 leaders
' summit.

Negative factors affecting oil prices

[OPEC cuts its oil demand growth forecast for the fifth time since April]

The Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand growth in 2022 for the fifth time since April, and further cut its growth forecast for next year, citing growing economic challenges such as high inflation and rising interest rates
.
OPEC said oil demand is expected to increase by 2.
55 million b/d, or 2.
6 percent, in 2022, 100,000 b/d
lower than its previous forecast, OPEC said it said.
OPEC expects oil demand to increase by 2.
24 million b/d next year, also 100,000 b/d
lower than its previous forecast.

Oil production in the Permian basins of Texas and New Mexico, the largest shale oil basin in the United States, will increase by about 39,000 b/d in December to a record 5.
499 million b/d
, the U.
S.
Energy Information Administration (EIA) said Monday in its productivity report.

[Investors assess the Fed's future path, U.
S.
stocks close lower]

Major U.
S.
stock indexes closed lower on Monday, led by real estate and consumer discretionary stocks, as investors digested Fed officials' comments on planned interest rate hikes and looked for the next catalyst
after last week's rally.
Earlier, the market briefly tug-saw up and down in the flat session, and the decline accelerated towards the end of the day, and the focus turned to the producer price index report due on Tuesday, and the market is highly sensitive
to inflation data.
Earlier on Monday, Fed Vice Chairman Lael Brainard said the Fed could soon slow the pace of
rate hikes.
This has boosted sentiment in the stock market to some extent
.
Earlier, Fed Governor Waller said on Sunday that the Fed may consider slowing the pace of interest rate hikes at its next meeting, but this should not be seen as a "softening"
of its commitment to reduce inflation.

Stocks rallied over the weekend on weaker-than-expected inflation, a report that boosted investors' hopes that the Federal Reserve could soften monetary tightening, which has hit markets
hard this year.
Eric Kuby, chief investment officer at North Star Investment Management Corp, said, "People remain sensitive to Fed officials' statements, one a little hawkish and one a little dovish
.
”

The S&P 500 posted its biggest weekly percentage gain since late June last week, while the tech-heavy Nasdaq posted its best weekly performance
since March.
More Fed officials will speak later this week, along with a slew of data, including retail sales and housing data, as well as earnings reports
from large retailers.

Yung-Yu Ma, chief investment strategist at BMO Wealth Management, said: "It makes sense that the market wants to pause, and it's really all trying to figure out the trajectory [of Fed policy] and what the next driver will be
.
" Among the S&P 500 sectors, real estate stocks fell 2.
7 percent, consumer discretionary stocks fell 1.
7 percent, and financials fell 1.
5 percent
.
In terms of company news, Amazon fell 2.
3% after The New York Times reported on Monday, citing people familiar with the matter, that Amazon plans to cut about 10,000 business and technology jobs
as soon as this week.

Biogen and Eli Lilly rose 3.
3 percent and 1.
3 percent, respectively, after Swiss rival Roche's new drug trials for Alzheimer's failed to produce the expected results
.

[Kuwait cuts December crude oil prices to Asia]

The official selling prices (OSPs) of two grades of crude oil sold by Kuwait to Asia in December were lowered from the previous month
, according to the documents.
The producer set the price of Kuwaiti crude oil exports (KEC) per barrel in December at $3.
20 above the Oman/Dubai average and $0.
80 lower than the previous month
.

[The probability of a 50 basis point rate hike by the Fed in December is 80.
6%]

According to CME "Fed Watch": the probability of the Fed raising interest rates by 50 basis points to the range of 4.
25%-4.
50% in December is 80.
6%, and the probability of raising interest rates by 75 basis points is 19.
4%; The probability of a cumulative rate hike of 75 basis points by February next year is 49.
1%, the probability of a cumulative rate hike of 100 basis points is 43.
3%, and the probability of a cumulative rate hike of 125 basis points is 7.
6%.

Factors affecting oil prices

[JPMorgan expects Brent oil prices to retest $100/barrel in the fourth quarter]

J.
P.
Morgan Global Commodities Research expects Brent oil prices to retest at $100 per barrel in Q4 2022 and an average of $98 per barrel in 2023, with the global oil market outsupplied in the fourth quarter of 2022 and now expected to widen to 900,000 b/d
in 2023.

"After a slight decline in the first quarter of 2023, Russian crude oil production is expected to stabilize at around
10 million b/d in the second half of 2023," JPMorgan said.
”

[U.
S.
household inflation expectations jump in October on concerns about a sharp rise in gasoline prices]

The Federal Reserve Bank of New York report notes that Americans are bracing for
higher inflation levels in the coming years in anticipation of a sharp jump in gasoline prices.
According to the October Consumer Expectations Survey, inflation is now expected to be 5.
9% in one year, 3.
1% in three years and 2.
4% in five years, all higher than predicted in the September survey
.
A deterioration in inflation expectations could create new challenges
for the Fed.

[Canada announces $500 million in military aid to Ukraine]

On November 14, local time, the website of the Canadian Prime Minister's Office issued a statement saying that Canadian Prime Minister Trudeau announced that Canada will provide 500 million Canadian dollars in military assistance
to Ukraine.
In addition, Canada will impose sanctions
on 23 individuals in Russia's judicial and security services.

Overall, epidemic concerns have once again dragged down oil prices, OPEC has lowered this year's oil demand growth forecast for the fifth time since April, and further lowered next year's growth forecast, further helping the bears, oil prices short-term bears are strong, pay attention to the IEA monthly report
within the day.

At 8:17 Beijing time, U.
S.
crude oil is now at $85.
31 per barrel
.