[ad_1]
In trading on Wednesday (2), crude oil futures prices closed higher because investors were betting that OPEC + would extend current production cuts, and EIA data showed that US crude inventories The US fell for two consecutive weeks.
Phil Flynn, Senior Market Analyst at Price Futures Group, noted that the content of the OPEC + negotiations was “a high degree of exit”, and its content indicated that “the previous practice of extending the three months was questioned, but now the practice is back on the negotiating table. “
OPEC + postponed the official meeting from 2 to Thursday earlier this week OPEC + is widely expected to reach a resolution to extend the implementation of the current scale of production reduction starting next year.
Amena Bakr, deputy director of the Energy Information Administration and OPEC’s chief representative, said on Twitter Wednesday: “Now the diplomatic atmosphere is more harmonious, and the delegation said that a positive consensus will be reached tomorrow.”
The postponement of the meeting by OPEC + has caused concerns in the market. Internal differences in the organization are feared to delay decision time, resulting in a 2 million barrel / day increase in production next month as originally planned. Given that the number of confirmed cases of new crowns in Europe and the United States is increasing and the demand for crude oil is weakening, More concerning.
Tariq Zahir, managing director of Tyche Capital Advisors, said that he expects OPEC + to agree to extend the current production cut (7.7 million barrels / day) by 3 months, because if a decision is not made, “we are afraid of see a sharp drop in oil prices. ” This is because the increase in the number of newly diagnosed cases in the United States, coupled with the recently enacted lockdown policy, will reduce energy demand.
- WTI crude futures for January delivery rose 73 cents, or nearly 1.6%, to close at $ 45.28 a barrel.
- The price of Brent crude futures for February delivery rose 83 cents, or nearly 1.8%, to settle at $ 48.25 a barrel.
Phil Flynn, Senior Market Analyst at Price Futures, said the UK approved a new crown vaccine, and House Speaker Nancy Pelosi and US Secretary of the Treasury Steven Mnuchin are reported to have , have held a meeting to discuss the stimulus plan for the new corona epidemic. , “Oil is suddenly bullish.” WTI crude oil futures prices have fallen in the last three business days.
EIA Inventory Report
The EIA announced on Wednesday that last week (11/27) US crude inventories fell 700,000 barrels. Although it is not as favorable as the 1.7 million barrels expected by economists at IHS Markit, it is in line with the increase announced by the API industry group later Tuesday. Compared to 4.15 million barrels, it’s a relief.
Matt Smith, director of commodities research at ClipperData, said: “Decreased refining activities and increased imports and production have led to a decrease in crude oil storage reduction.”
“However, implicit demand during the holiday period declined significantly, leading to a sharp increase in gasoline and distillate petroleum inventories, so the overall report tends to be pessimistic.”
The EIA announced that last week the supply of gasoline increased by 3.5 million barrels and the supply of distillate oil increased by 3.2 million barrels.
IHS Markit previously expected an increase in gasoline supply by 2 million barrels and distillate supply by 100,000 barrels.
EIA data also showed that the oil storage facility in Cushing, Oklahoma lost 300,000 barrels during the week.
- The price of gasoline futures for January delivery rose 1.6%, closing at $ 1.2399 a gallon.
- The price of hot fuel oil futures for January delivery rose 1.4% to close at $ 1.3662 per gallon.
- The price of natural gas futures for January delivery fell 3.5% to close at US $ 2.78 per million Btu.
Commodities analyst Eugen Weinberg said that OPEC + can resolve the cargo dispute caused by production cuts at the meeting.
“This means that other non-OPEC + producers will be happy to fill the supply gap left by the ‘withdrawal’ from the alliance.” Weinberg noted that Norway has confirmed that its voluntary production reduction agreement will expire at the end of this year.
[ad_2]
