OPEC lowers demand forecast, Biden faces pressure to control oil prices, release 60 million barrels of crude oil reserves?

During the Asian session on Friday (November 12), U.
S.
oil is now at $81.
32 / barrel; Oil prices fluctuated sharply on Thursday, reaching an intraday low of $80.
20 a barrel, dragged down by OPEC's lowered demand forecasts; But the market rebounded from an intraday low of $80.
20/b as the market believed that post-pandemic demand would further strengthen in the coming months, while investors weighed the possibility of
White House intervention in the market to calm energy prices.

During the day, the focus will be on the University of Michigan consumer confidence index in November, JOLTs job vacancies in September, and IEA monthly report; Saturday at 1:00 Fed Williams speaks
.

Negative factors affecting oil prices

[OPEC cuts global oil demand forecast for fourth quarter]

The Organization of the Petroleum Exporting Countries (OPEC) on Thursday cut its forecast for global oil demand for the final quarter of 2021 as high energy prices dampened the economy's recovery from the coronavirus pandemic, though it maintained its forecast
of strong growth in 2022 above pre-pandemic levels.

OPEC's monthly report also raised its forecast for supply to U.
S.
shale producers next year, which could put a headwind
on efforts by the group and its allies to balance markets.

OPEC said it expects average oil demand of 99.
49 million b/d in the fourth quarter of 2021, 330,000 b/d
lower than last month's forecast.
Demand growth forecasts for this year were cut by 160,000 b/d to 5.
65 million b/d
.

OPEC said in the report, "The assumption now is that the pace of recovery in the fourth quarter of 2021 will slow due
to higher energy prices.
" The group also cited slower-than-expected demand from China and India as the reason for the
downward revision of forecasts.

According to the latest forecasts, global oil consumption is expected to cross the 100 million b/d mark in the third quarter of 2022, three months
later than last month's forecast.

OPEC also said it expects global oil demand to grow by 4.
15 million b/d next year, maintaining last month's forecast, which will push global oil consumption above 2019 levels
.

[Biden faces increasing pressure to control oil prices]

Crude oil prices fluctuated sharply on Thursday as investors weighed the possibility of White House intervention in the
market to calm energy prices.
U.
S.
crude futures have been oscillating between gains and losses on Thursday, closing up 0.
3 percent as inflation reaches multi-decade highs and U.
S.
President Joe Biden is facing increasing pressure, including from party insiders, to take action in response to rising
energy prices.
His options include releasing the Strategic Petroleum Reserve or even banning oil exports
.

Rob Haworth, senior investment strategist at US Bank Wealth Management, said we are in a situation where demand is rising and prices are rising, so a longer-term supply solution
is needed.

Meanwhile, traders cited Wood Mackenzie data that crude inventories fell by about 36,000 barrels
in Cushing, Oklahoma, the delivery site of U.
S.
benchmark crude futures on Nov.
5-9.

West Texas Intermediate futures for December delivery rose 25 cents to settle at $81.
59 a barrel, while Brent crude futures for January delivery rose 23 cents to settle at $
82.
87 a barrel.

Edward Moya, a senior analyst at OANDA, said: "Crude oil prices are trying to gain a foothold and fell yesterday as soaring inflation in the United States increased pressure
on the Biden administration to use strategic oil reserves.
But energy traders know that releasing the Strategic Petroleum Reserve will only bring very short-term price declines and will not relieve much pressure
on U.
S.
consumers.
”

[U.
S.
could release up to 60 million barrels of oil reserves]

Citi said the U.
S.
could release between 45 million barrels and 60 million barrels of oil from the Strategic Petroleum Reserve (SPR) by forcing the sale of 20 million barrels of oil
ahead of schedule next year.
The move could help curb oil prices after OPEC+ decided to raise production by 400,000 b/d in December, rejecting calls from importers to speed up production
.
The short-term energy outlook released by the U.
S.
Energy Information Administration (EIA) is more accommodative, but the oil and gas market remains tight, and the possibility
of the US releasing SPR cannot be ruled out.

[U.
S.
stocks narrow their rally on Thursday]

The S&P 500 rose less than 0.
1 percent, led by materials and technology stocks, which fell 0.
8 percent on Wednesday, its biggest drop in more than a month, and Tesla's stock fluctuated after documents showed CEO Elon Musk cut $5 billion in shares, Disney fell, and Beyond Meat Inc.
tumbled as quarterly results disappointed, investors are preparing for an earlier adjustment in monetary policy amid higher-than-expected CPI data hitting inflation transitory terms, and persistently high inflation could force the Federal Reserve to cut its size more sharply or raise interest rates
faster.

At the same time, strong earnings and economic growth prospects have supported stocks hovering near record highs, with Jeff Schulze, investment strategist at Clearbridge Investments, said the recent decline in equities was due to both profit-taking factors and concerns about margins and overall earnings in 2022, "While inflation did not affect third-quarter earnings, if inflation remains at disturbing levels for three or four quarters, it will certainly affect margins and cause demand destruction to the economy.
" Both are resistance to profitability
.
”

Factors affecting oil prices

[Belarus threatens to shut down EU gas supplies to fight back border disputes]

Belarusian President Alexander Lukashenko has threatened to shut down a vital pipeline
carrying Russian gas to the EU if Poland closes its borders to thousands of migrants seeking to enter EU territory.

Belarusian state-run news agency Belta reported that Lukashenko said in a meeting with the government on Thursday that "we heat Europe, but they threaten that we will close our borders
.
" Referring to the Yamal-Europe pipeline through Belarus, he said, "What if we cut off the gas there?" Therefore, I advise the Polish leadership, Lithuanians and other brainless people to think before
speaking.
”

Lukashenko's threat comes as Europe grapples with its worst energy crisis in decades over restrictions on Russian gas shipments and competes with Asia for liquefied natural gas
.
Russia, the continent's main fuel supplier, began increasing gas supplies earlier this week, but so far flows have remained below seasonal standards
.

After Lukashenko's talk, benchmark European gas futures pulled back on losses
.
So far this year, about 20 percent of Russia's gas shipments to the EU have passed through Belarus, mainly through the Yamal-Europe pipeline, through Belarus and Poland and then to Germany
.

[U.
S.
oil supply growth will be limited by well capacity]

Several JPMorgan analysts, including Natasha, said total U.
S.
crude and condensate production could reach 11.
71 million b/d in 2021, up 30,000 b/d
from previous forecasts, JPMorgan said.
Oil supply is expected to be around 12.
52 million b/d by 2022, down 209,000 b/d
from previous estimates.
Production growth is constrained by an increasing number of wells coming from private drilling companies, which typically have lower well capacity than public companies
.
Slower growth in crude oil and condensate will be complemented
by explosive growth in natural gas condensate (NGL) production.

Jim Ritterbusch, president of Ritterbusch and Associates LLC, said oil prices will reach new highs
as global oil demand exceeds new production and the factors needed for the oil market to reach the top remain uncertain.

Overall, the OPEC energy report lowered demand forecasts, limiting oil price gains in the short term; Investors are assessing the possibility of the Biden administration's action to suppress oil prices, and the IEA monthly report will be released in the day, and oil prices may fluctuate more in the short term; In this regard, the three monthly reports of the crude oil market have been released this week, and it is close to the weekend, it is important to pay attention to
whether the Biden administration will release relevant measures to restrict oil prices over the weekend.

At 08:06 Beijing time, U.
S.
crude oil is now at $81.
40 per barrel
.