Crude oil trading reminder: Iran launches hundreds of new centrifuges! Libyan production and exports both rebounded, oil prices at the 90 mark?

At the beginning of the Asian session on Tuesday (August 2), U.S. oil is now at $94.08 / barrel; Oil prices tumbled more than 4 percent on Monday, aided by weak manufacturing data in several countries, which weighed on demand outlook, with Libyan crude oil production and exports rebounding as investors prepared for this week's supply meeting between OPEC and its oil-producing allies.

The focus of the day is on the June JOLTs job vacancies in the United States.

Negative factors affecting oil prices

【U.S. stocks are lower in shock trading】

U.S. stocks closed lower on Monday, with intraday volatility as ExxonMobil and other energy stocks moved lower while Boeing rose while investors digested the biggest monthly gains recorded in two years in July.

Stocks gave back some of the strong gains recorded last week, and U.S. stocks jumped last week, driven by bets that the Fed might not need to raise rates as aggressively as some feared. The S&P 500 and NASDAQ recorded their largest monthly percentage gains since 2020 in July, also fueled by stronger-than-expected second-quarter results. The S&P 500 moved up and down the flat on Monday, with some investors becoming more cautious after the recent rally.

The Fed said its goal is to curb inflation and lower demand by raising interest rates, but some investors and analysts worry that the Fed's aggressive move could push up unemployment and weaken the economy.

Tom Martin, senior portfolio manager at GLOBALTInvestments, said, "There are still many questions about whether we have actually come out of the economic predicament, and may not have been, and even the (economic) impact of the Fed's interest rate hikes is far from apparent." ”

Demand concerns dragged oil prices lower, weighing on the energy sector. The S&P 500 Energy Stock Index tumbled, losing the most of its 11 sectors. ExxonMobil fell 2.5 percent, one of the biggest drags on the S&P 500.

Markets will carefully analyze the monthly U.S. jobs report, which will be released on Friday, for clues about what the Fed will do next to deal with inflation at decades-highs.

[Russia's crude oil production increases to 9.78 million b/d in June]

A report quoted OPEC+ secondary sources as saying That Russia produced 9.78 million bpd in June, up from 9.27 million bpd in May. According to the report, Russia's output in June was 885,000 b/d lower than the production quota under the OPEC+ agreement, an improvement from the gap of 1.28 million b/d in May.

OPEC+, which is composed of the OPEC and its allies, including Russia, will meet on Wednesday to decide on September's output. Two of the eight OPEC+ sources surveyed by Reuters said a modest september increase would be discussed at the Aug. 3 meeting. The rest said production was likely to remain stable.

Analysts surveyed by Reuters cut their forecast for the average Brent price in 2022 to $105.75, the first downward revision since April. Their forecast for the average price of U.S. crude oil fell to $101.28.

【U.S. manufacturing activity slows slightly in July】

U.S. manufacturing activity slowed less than expected in July, with signs that supply constraints are easing and the manufacturing input price sub-indicator fell to a two-year low, suggesting inflation may have peaked. The Institute for Supply Management 's (ISM) National Factory Activity Index fell to 52.8 in July, its lowest since June 2020 and better than the Reuters survey's estimate of 52.0. The forward-looking new orders sub-index for the ISM survey fell to 48.0 in July from 49.2 in June, the second consecutive month of contraction. This, coupled with a steady decline in undelivered orders, suggests a further slowdown in manufacturing in the coming months.

[Libya rebounds in oil production and exports in the second half of July]

Libya's crude oil production and exports climbed after the ban was lifted in mid-July, a trend that could help ease concerns about the OPEC member's ability to supply global markets. According to Bloomberg Tanker Tracking data, Libya's average exports in July were about 589,000 bpd, the lowest level since October 2020. However, after the lockdown was lifted on July 15, exports in the second half of the month were more than double the volume of the first half. The Libyan government has appointed a new chairman to run the national oil company, and officials have struck a deal with protesters and tribal leaders to reopen oil fields and export terminals that have been largely closed for months. Oil Minister MohamedOun said oil production rebounded to 1.2 million barrels per day.

【Illinois, USA declares public health emergency due to monkeypox outbreak】

On August 1, local time, the governor of Illinois, Pritzker, declared that the state had entered a state of public health emergency due to the monkeypox epidemic. Pritzker also said monkeypox is a rare but potentially serious disease that requires the full mobilization of all available public health resources to respond to the current outbreak. According to the U.S. Centers for Disease Control and Prevention, there are currently more than 5,000 confirmed cases of monkeypox in the United States, and 520 cases in Illinois, second only to New York and California.

Bullish factors affecting oil prices

Crude inventories in the U.S. Strategic Petroleum Reserve fell by 4.6 million barrels last week.

The U.S. Department of Energy said crude inventories in the U.S. Strategic Petroleum Reserve (SPR) fell by 4.6 million barrels last week to their lowest level since May 1985. Crude inventories in the Strategic Petroleum Reserve (SPR) fell to 469.9 million barrels in the week ended July 29, the smallest weekly decline since May, according to the Department of Energy.

[U.S. to provide Ukraine with additional $550 million worth of security assistance]

On August 1, local time, US officials revealed that the United States will provide additional security assistance worth another $550 million to Ukraine. Kremlin spokesman Peskov said equipment for the Nord Stream One gas pipeline was malfunctioning and needed urgent repairs, adding that the situation needed to be repaired and that Russia could do little.

[Iran orders the start of hundreds of new centrifuges]

On August 1, local time, Iran Atomic Energy Organization spokesman KamalWandi said that Iran has ordered the start of hundreds of new centrifuges and has notified the International Atomic Energy Agency.

Kamalwandi said in an interview with Iranian state television on the same day that the newly launched centrifuges include the first-generation IR-1 centrifuge and the advanced IR-6 centrifuge.

He said the move was to increase uranium enrichment activities to meet national needs in accordance with the Anti-Sanctions Strategy Law passed by The Iranian parliament. In December 2020, the Iranian parliament passed the Anti-Sanctions Strategy Law, requiring the government to further break through the restrictions of the JCPOA without finding the lifting of sanctions against Iran within a certain period of time.

【U.S. sanctions 6 Iranian companies】

According to Iran's Tasnim News Agency, on August 1, local time, the US Treasury Department put 6 companies and a ship on the sanctions list on the grounds of "having a connection with Iran". Iranian Foreign Ministry spokesman Kanani said at a press conference earlier in the same day that any attempt by the United States to obstruct Iran's economy and business will lead to difficulties in negotiations on the Iranian nuclear issue, and Iran will adjust its own actions according to the actions of the US government.

[Russia imposes sanctions on 39 British citizens]

On August 1, local time, the Russian side announced sanctions against 39 British politicians, journalists and businessmen.

Overall, although geopolitical tensions continue to escalate to provide support for oil prices, and the Iranian nuclear negotiations may once again reach an impasse due to tensions in US-Iran relations; However, weak economic data, increased demand outlook concerns, Libyan production rebounded, while the market waited for the OPEC+ meeting, multiple bearish factors, oil prices or return to the 90 mark.

This article originated from Huitong Network