U.S. oil fell slightly to $83.16 a barrel during the Asian session on November 1; oil prices rose 11 percent in October as signs of consumption exceeding supply and inventory declines, and continued shortages of natural gas boosted demand for petroleum products and helped push oil prices higher in October. Oil fundamentals this week will be largely influenced by the Nov. 4 meeting of OPEC+, with traders continuing to assess the possibility of further production increases from OPEC+, and the resumption of nuclear negotiations could weigh on oil prices in the near term.
During the Asian session on Monday (November 1), U.S. oil fell slightly, now at $83.16/b; oil prices rose 11% in October as signs of consumption exceeding supply and inventory declines, and continued shortage of natural gas boosted demand for petroleum products and helped push oil prices higher in October; OPEC+ may affect oil prices this week.
During the day, the focus was on China's October Caixin manufacturing PMI, the United States' October Markit manufacturing PMI final value, and US President Biden's attendance at the United Nations Climate Conference.
【The United States and energy consuming powers plan to put pressure on OPEC+ 】
A senior U.S. official told reporters in Rome that the U.S. was discussing with other energy-consuming powers how to urge the Organization of the Petroleum Exporting Countries (OPEC) + to increase production to address the current energy shortage. Leaders will also discuss how OPEC+, which has 23 members, including Russia, can respond if it does not act, the official said. But he said he wouldn't randomly guess what options were available.
In addition, foreign media earlier quoted a number of diplomats and industry insiders as reporting that a fierce action is also being launched to persuade OPEC+ to speed up production increases. Saudi King Salman bin Abdulaziz Al Saud spoke via video at the G20 summit in Rome on Friday, saying the government seeks a "balance" in the energy market.
According to the Saudi News Agency, he said that "Saudi Arabia will continue to play a leading role in the economy, health, the recovery of the global crisis, and the search for a balance to achieve security and stability in the energy market.". OPEC+ will hold an online meeting on November 4 to evaluate policies.
[Iraq believes that the increase in oil production of 400,000 barrels per day is sufficient to meet demand]
Iraqi Oil Minister Ihsan Abdul Jabbar said the 400,000 bpd oil production increase was enough to meet demand. In a few days, representatives of some of the world's oil producers will meet to discuss the level of oil production. The 23-member Organization of the Petroleum Exporting Countries (OPEC) + coalition, jointly led by Saudi Arabia and Russia, is resuming production at a modest rate of 400,000 bpd/day per month. This increase in production is expected to be approved again during this week's meeting of ministers.
Jabbar said rising natural gas and coal prices in Asia and Europe could lead to higher oil demand this winter. He said in a text message that a 400,000 barrel-per-day increase in production per month would eventually help the oil market return to stability.
Ed Moya, a senior market analyst at Oanda Corp., said the gap in the oil market may be smaller than traders initially thought, but it will not disappear anytime soon, and crude oil prices may return to their upward momentum if OPEC+ insists on continuing to gradually increase production.
[The United States, Britain, France, and Germany believe that it is still possible to restart the Iranian nuclear agreement during the G20 summit]
U.S. President Joe Biden and the leaders of Germany, France and Britain said they still saw an opportunity to restart the deal with Iran on its nuclear program, but iran must change course before sanctions could be eased.
The leaders of the countries issued a joint statement after meeting on the sidelines of the Group of Twenty (G20) summit in Rome, saying, "We firmly believe that it is still possible to quickly reach and implement an understanding on the resumption of full implementation of the treaty, thereby ensuring that Iran's nuclear program is used only for peaceful purposes in the long term and providing for the easing of sanctions that have a lasting impact on Iran's economic growth." ”
Leaders also said Iran's production of highly enriched uranium also reduced the intensity of international surveillance, which was "alarming." They called on Iran's new president, Lehi, to seize the opportunity, but did not give a clear time frame. Asked when he wanted talks to restart, Biden said he "plans to restart talks."
【US Consumer Confidence Index Declines in October Month-on-Month】
U.S. consumer confidence slipped in October from the previous month, and American expectations for inflation in the coming year continued to rise. Data released on Friday showed the final value of the University of Michigan Consumer Confidence Index to 71.7 from 72.8 in September and 71.4 in early October.
Richard Curtin, who led the investigation, said in a statement that "rising inflation and lower confidence in the government's economic policies offset the positive impact of rising revenue expectations and easing the epidemic".
The data shows that despite the recent decline in new COVID-19 cases in many states, concerns about rising prices remain a primary consideration, dampening consumer optimism. But even so, Curtin said consumers still "want to start spending again during the holiday season." Consumers expect inflation to rise to 4.8 percent in the coming year, the highest level since 2008 and up from 4.6 percent a month ago. They also expect inflation to rise to 2.9 percent over the next five years, down from 3 percent in September.
According to a report by the University of Michigan, purchases of consumer durables such as home appliances and electronics deteriorated in October from the previous month. The indicator fell to 85 in October, the lowest since 1980.
【OPEC+ Alliance Forecast for SignificantLy Lower Oil Supply Gap】
OPEC+ technical experts lowered their expectations for a supply gap in the global oil market this quarter. The OPEC+ Alliance's Joint Technical Committee concluded on Thursday that the global oil supply gap in the fourth quarter would average just 300,000 barrels per day, the group's representative revealed. Delegates said that was well below the initially submitted gap figure of 1.1 million barrels per day, which the committee revised its views based on the latest demand data.
The Organization of the Petroleum Exporting Countries and its partners met on November 4 to assess their plans to gradually resume production production that has been shut down during the pandemic. The Joint Technical Committee's revision of the supply and demand situation is likely to support Saudi Arabia's cautious stance. The country has rejected calls to speed up production. While the rise in crude oil prices to a seven-year high prompted the White House to seek increased supply, Saudi Arabia warned that demand remains vulnerable to the ongoing outbreak of the coronavirus outbreak.
Saudi Energy Minister Prince Abdulaziz bin Salman said in an interview with Bloomberg Television on October 24 that "we are not out of the downturn brought about by the epidemic," "When the crisis is contained, but it is not necessarily over, people need to be careful and avoid taking it for granted." The 23-member OPEC+ coalition, jointly led by Saudi Arabia and Russia, is resuming production at a modest rate of 400,000 barrels per month. When ministers meet online next week, it is expected to approve another 400,000 barrel increases.
Goldman Sachs said oil price bulls remain intact, reiterating Brent's target of $90/b, projecting that the oil market deficit would remain at 2.5 million b/d and that OPEC and shale drillers (increased) supply would respond very slowly.
【The S&P 500 index first suppressed and then rose, the market got rid of the impact of the weak performance of technology giants】
U.S. stocks rose on Friday, accompanied by concerns about inflation and currency tightening, as traders assessed disappointing corporate performance and turmoil in the bond market. The S&P 500 opened lower, weighing on the performance of Amazon and Apple. The S&P 500 rose 6.9 percent in October, its biggest monthly gain since November.
Adam Phillips, managing director of portfolio strategies at EP Wealth Advisors, said, "Investors look a little excited as Halloween approaches, and most of us are prepared for today's turmoil following the apple and Amazon results announcements. Fortunately, strong performance reports from companies like ExxonMobil and Chevron helped change market expectations. ”
In other ways, inflationary pressures and the prospect of interest rate hikes have triggered sharp volatility in the U.S. Treasury market. The 10-year Yield fell to 1.56 percent, with positive corporate results helping to support global equities. But inflation risks from supply chain disruption and rising raw material prices are raising expectations of rate hikes, weakening the economic outlook.
Overall, oil prices hit a seven-year high in October due to the impact of the global energy crisis; but last week traders took profits and oil prices fell; this week's oil price fundamentals will be mainly affected by the meeting of OPEC+ on November 4, traders continue to assess the possibility of OPEC+ further increase production, and the resumption of nuclear negotiations may drag down oil prices in the short term.
This article originated from Huitong Network