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    Home > Chemicals Industry > Petrochemical News > Crude oil rebounded strongly

    Crude oil rebounded strongly

    • Last Update: 2022-11-11
    • Source: Internet
    • Author: User
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    Last week (October 31-November 4), international crude oil experienced a sharp rebound, especially after the release of the US non-farm data, US WTI crude oil once rose to $92.
    87 / barrel, up more than 5.
    3% in the day, Brent crude oil rose to $98.
    81 / barrel when the US stock market updated the daily high, up 4.
    4%
    in the day.
    As of the close, WTI crude oil futures closed up 5.
    03%, hitting a new high since October 7; Brent crude oil futures closed up 4.
    12%, the highest
    closing since August 30.

    Zhong Meiyan, director of energy research at Everbright Futures Research Institute, believes that the rebound in oil prices is mainly driven
    by the resonance of macro and fundamental support.
    From the fundamental data, the slowdown in OPEC production in October significantly supported market confidence in the production cut, of which the 10 OPEC member countries participating in the production cut agreement crude oil production was 1.
    36 million b/d below the target output, the target output was 26.
    689 million b/d, while the actual output was only 25.
    33 million b/d
    .
    In November, whether OPEC production can really fulfill the production reduction depends on whether Saudi Arabia and the United Arab Emirates complete the production reduction in accordance with the agreement, and whether Russia will reduce production, and the support from the supply side is strong
    .
    On the demand side, U.
    S.
    inventories remain at low water levels, and strong export demand makes aggregate demand resilient
    .
    U.
    S.
    strategic oil reserves fell 1.
    93 million barrels from the previous week to 399.
    792 million barrels in the week ended Oct.
    28, the lowest since the week of May 18, 1984; U.
    S.
    gasoline inventories were 3.
    6% lower than a year ago and 6% lower than the same period in the past five years; Distillate inventories are 16% lower than a year ago and 19%
    lower than the same period over the past five years.
    Supported by low inventory levels, it is difficult for oil prices to fall
    sharply.

    In addition, from a macro perspective, the Fed's November interest rate hike boots landed, and the subsequent interest rate hike may ease slightly to ease market concerns, and the non-farm payrolls data is also better than expected
    .
    Zhong Meiyan said that this week we need to pay attention to whether the inflation data shows a high level and falls sharply, which will generally guide the marginal change in policy expectations, and also pay attention to the impact of the results of
    the US midterm elections on November 8.

    "After the results of the Fed's November interest rate meeting, the market's expectations for the Fed's future interest rate hike slowdown have increased, and the improvement in risk appetite is the core of
    the strength of asset prices in the past week.
    In addition to the sharp rise in crude oil prices, precious metals, which are more sensitive to interest rates, saw a historically rare surge, and copper, which has lower inventories, posted its biggest one-day increase in the past six years
    .
    Guotai Junan Futures analyst Huang Liunan said
    .

    Huang Liunan believes that overall, the upside risk at the quarterly level still exists, or lasts for 2-3 months
    .
    The two outer oil markets are still likely to rise to $100 / barrel
    in the fourth quarter.
    "First, from the current supply and demand side of many signals, crude oil supply is still tight
    .
    Over the past week, refined products have continued to be
    strong.
    On the one hand, the rise in oil prices has driven the center of gravity of refined oil products upward
    .
    On the other hand, the relatively low natural gas price of the warehouse and consumption ushered in an over-falling rebound, driving the diesel crack spread to strengthen
    again.
    From the perspective of the supply and demand pattern of refined oil products, oil products are still in a state of destocking, and gasoline inventories have been significantly lower than the historical inventories
    of the past five years.
    In this case, although the increase in the operating rate of refineries in the northern hemisphere may drive the accumulation of diesel and diesel in the future, it also increases the demand
    for primary processing of crude oil.
    At present, the seasonal inflection point of crude oil destocking at home and abroad has shown signs of early arrival, and the starting point of destocking is originally very low; Second, since September, the market has been too consistent with the recessionary bearish trading under the overseas tightening cycle, and it is necessary to be vigilant against the reversal
    of risk appetite in stages.
    This has been continuously verified by the market recently, and the strength of precious metals in the past week vividly reflects the recovery of market risk appetite, and will undoubtedly bring support
    to crude oil prices.
    He said
    .

    "However, it should be noted that from the perspective of the collective performance of commodities, this round of rise can be positioned as a phased rebound rather than a reversal, because the decline in commodity resonance in the early stage led to the market, and under the pessimistic expectations of market consistency, the overall price center of gravity of commodities has shifted, resulting in a significant narrowing of product-side profits and continuous destocking
    .
    " After the macro margin improves, the repair of pessimistic expectations has led to a replenishment mentality in the market, and the increase in speculative demand has led to a resonant rebound of commodities, but it is still necessary to pay attention to the strength
    of subsequent real demand support.
    Commodities are treated with a rebound idea in the short term, and it is still difficult to reverse in
    the medium term.
    Zhong Meiyan said
    .

    Judging by Powell's speech, Powell's speech dashed hopes that the Fed would shift to more accommodative policy, and the rate hike target would be higher and last longer
    .
    The current market outlook is that the rate hike may continue until March next year, and the target rate may exceed 4.
    5%.

    Zhong Meiyan said that from the perspective of crude oil, there are two main aspects affecting prices: on the one hand, crude oil is denominated in US dollars, and in the context of a strong dollar, oil prices will weaken, and once the dollar weakens, the price of risk assets such as crude oil is supported, but not
    absolutely.
    A weaker dollar high will make oil prices oscillate stronger
    .
    On the other hand, high interest rates have a crowding out effect on demand, and due to the lag in the impact of interest rate hikes on demand, in the context of four consecutive and high-intensity interest rate hikes, demand constraints drag oil prices again, thus significantly constraining
    high oil prices.
    The short-term oil price trend oscillates strongly, but the high point is still difficult to cross effectively, it is necessary to pay attention to the follow-up EU sanctions on Russia, whether it leads to an emergency on the supply side of the market, and the short-term oil price center of gravity will test the resistance
    of the $100 / barrel integer mark.

    "In the short term, inflation data is nothing more than affecting the market's prediction
    of the Fed's interest rate hike.
    Considering that the Fed has previously stated that it may slow down interest rate hikes, we believe that the market triggered by inflation data exceeding expectations is unlikely to increase the
    Fed's interest rate hikes.
    The focus of the fourth quarter will once again return to the confirmation of the supply and demand side of crude oil itself, that is, whether the downstream refined oil products have accumulated significantly due to the contraction of terminal demand
    .
    Therefore, for the fourth quarter, the impact of the world's major oil inventories and crack spread data on oil prices will be significantly higher
    than in the previous three quarters.
    Huang Liunan thinks
    .


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