Shanghai Medium-Term Futures: Geopolitical risks drive oil prices higher

The futures price of the main contract of crude oil fluctuated to the upside
overnight.
As the United States is ready to replenish its warehouse at low prices, and the European Union will embargo Russian oil, external oil prices rose
for the first time in four trading days.
On the supply side, the OPEC+ ministerial meeting on October 5 decided to sharply cut crude oil production by 2 million barrels
per day from November.
This is the largest OPEC+ production cut since the outbreak of the new crown epidemic in 2020, equivalent to about 2% of global oil demand, and may be extended until December 31
, 2023.
U.
S.
crude oil production recorded 12 million b/d in the week ended Oct.
14, up 100,000 b/d
from last week.

Crude oil production maintained a low growth rate
.
On the demand side, under high inflationary pressure, the market's expectations for a sharp interest rate hike by the Fed remain, recession worries continue, and crude oil demand is under pressure
.
The average operating load of major domestic refineries in the week ended September 29 was 74.
68%, up 0.
94%
from mid-September.
In October, Yanshan Petrochemical 2# atmospheric pressure reducing device will be overhauled, Jingmen Petrochemical may enter the whole plant for maintenance in the second half of the month, and it is expected that the average operating load of the main domestic refinery in October may rise
slightly.
The average operating load of the Shandong Dilian Normal Pressure Relief Device in the week ended October 12 was 61.
66%, up 2.
17%
from the pre-holiday period.

In the short term, there is no maintenance plan for the refinery, and the primary processing load of individual refineries may still increase, and it is expected that the operating load of Shandong refinery will continue to rise steadily
.
Overall, the current changes in the demand for crude oil market are the main factors affecting the market mentality, but due to the continued tight supply, it is operationally recommended to pay close attention to the situation in Russia and Ukraine and the Fed's interest rate hike while focusing on swing trading
.