On June 8, international oil prices rose, and both WTI and Brent reached their highest levels in more than two years. The settlement price of the main contract in the US WTI crude oil futures market was US $70.05/barrel, up to US $0.82 or 1.2%. Brent crude oil futures market settlement price of the main contract at 72.22 U.S. dollars/barrel, or 0.73 U.S. dollars or 1.0%. Both US oil and Buyou reached new highs in more than two years. Market participants are optimistic about the economic recovery, North America has entered the driving season to boost demand, adding to the slow progress of us Iran nuclear negotiations, further pushing up oil prices.
According to the monitoring of the SunSirs, affected by the severe epidemic situation in India and the breakthrough progress in the US Iran nuclear negotiations, the international oil price has been rising unilaterally since it reached the bottom on May 20. As of June 8, WTI has increased by 13.09%, and Brent has also increased by more than 10%.
In the context of the epidemic, oil prices continued to rise. On the one hand, at the macro level, the Federal Reserve continued quantitative easing, which affected the decline of the US dollar and brought upward momentum to oil prices. More importantly, the continuous improvement in the supply and demand side of crude oil is the main driver of the upward trend of oil prices.
The supply-side risk performance of oil price is further controllable due to the continuous release of bad news of us Iran nuclear negotiations. On the one hand, OPEC and its allies (OPEC +) continued to promote the production reduction policy, which laid the main tone for the prevention and control of market supply risk. According to the data, the implementation rate of OPEC + production reduction in April was 114%. As OPEC+ began to ease production quotas in May, the market generally accepted the increase despite recent news that OPEC+ crude production jumped by 430,000 b/d in May. Agency estimates in May cut the implementation rate is still close to 100%. Even more, boost market confidence, OPEC + production mainly adjusted according to market demand, and according to the survey, due to the strong demand for major clients, the Saudi oil exports may rise sharply, at the same time its crude oil inventories and refining business also saw strong growth. Warming demand is the fundamental reason behind OPEC+ easing production quotas.
There are signs that the current fuel demand does continue to improve. Although the epidemic situation in some Asian countries is still severe, the economic recovery in Europe and the United States is outstanding. According to the news on June 8, the US Energy Information Agency (EIA) sharply increased the crude oil price forecast in 2021. Specifically, it lowered the forecast of global oil demand growth in 2021 by 10000 B / D to 5.41 million B / d. In its monthly forecast, the agency lowered its forecast for oil demand growth in 2022 by 90000 B / D to 3.64 million B / d. Data show that the growth rate of US crude oil demand in 2021 is expected to be 1.49 million barrels/day, higher than the previous forecast of 1.39 million barrels/day. It shows that the institution is still full of confidence in the future.
In addition, the EIA has recorded a decline in U.S. commercial crude oil stocks for several consecutive weeks. A survey released on Tuesday showed that U.S. crude oil stocks were expected to decline for the third consecutive week last week. The average estimate of nine analysts interviewed was that U.S. crude oil stocks were expected to decrease by about 2 million barrels last week.
SunSirs believes that in the short term, the oil price has reached a phased high, accumulating certain risks. The market is still disturbed by the pending US Iran nuclear negotiation policy. In the long term, it is still necessary to pay attention to the trend of the epidemic situation and the progress of vaccination. However, the certainty of fuel demand recovery is also predictable, and the agency's forecast of future oil prices has also boosted market confidence. Considering comprehensively, the oil price may fluctuate shortly, and the medium and long-term oil price still has action power.
