Supply and demand gap may continue to support international oil prices

After international oil prices plummeted by more than 6% in the previous trading day, they rose significantly on the 20th
.

The analysis pointed out that although the decision of major oil-producing countries to increase production has caused market concerns, it is expected that with the rebound in global demand, the gap between supply and demand will still exist, and international oil prices are expected to continue to be supported

As of the close of the 20th, the price of light crude oil futures for delivery in August on the New York Mercantile Exchange rose by $1 to close at $67.

42 per barrel, an increase of 1.
51%; the price of London Brent crude oil futures for delivery in September rose by $0.

Affected by factors such as adjustments in production by major oil-producing countries and market concerns about the epidemic situation, oil prices in New York and Brent oil prices in London fell sharply by 7.

51% and 6.

The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing countries said on the 18th that they would extend the current production reduction agreement that was originally scheduled to expire in April 2022 to the end of 2022, and start the monthly average daily output from August this year.

Increase by 400,000 barrels

However, analysts believe that the gradual increase in production agreements reached by major oil-producing countries will not cause a significant increase in market supply in the short term, but will help stabilize market expectations.

The biggest variable facing the oil price outlook is still the global epidemic trend, and the market may be more sensitive

Helima Croft, head of global commodity strategy at Royal Bank of Canada, believes that the market can absorb the 400,000 barrels of daily increase in crude oil supply per month
.

Commerzbank analyst Eugen Weinberg said that the agreement reached between OPEC and non-OPEC oil-producing countries has resolved internal differences, which is conducive to restoring investor confidence and expectations, and is good for oil prices

There is also a point of view that, from the perspective of supply and demand, although market concerns about the spread of the new crown mutant virus delta strain are increasing, global oil demand is still in the process of rapid recovery, and there is still a short-term oil supply gap.

This is expected to be Continue to support oil prices

　　OPEC said that with the acceleration of the new crown vaccination, the economy in most parts of the world is still recovering, oil demand has obvious signs of growth, and the national oil inventory of the Organization for Economic Cooperation and Development has fallen
.

　　According to the International Energy Agency's forecast, oil demand will rebound strongly in the second half of 2021, and energy demand for the whole year is expected to increase by 4.

6%

　　Affected by the impact of the epidemic, international oil prices fell to negative values ​​in April last year.
OPEC and non-OPEC oil-producing countries also reached a production reduction agreement that month, reducing production by an average of 9.
7 million barrels per day
.
Since the implementation of the production reduction agreement in May last year, international oil prices have gradually recovered
.
In April this year, the major oil-producing countries decided to gradually increase oil production starting in May.
The current reduction in production is about 5.
8 million barrels per day
.
(Reporter Wang Jing)

　　Transfer from: Economic Information Daily