Text: 741 words, estimated reading time: 2 minutes, 1 picture
News summary:
- Oil prices fell to their eight-month lowest point last week due to concerns about the economic recession. Oil prices are likely to experience their first quarterly losses since 2020, and
- OPEC+ is considering a sharp cut to maintain oil prices, so oil prices may rise in the fourth quarter.
- EU embargo on Russian maritime oil will take effect in December, which will exacerbate supply tightness and potentially alleviate demand damage.
Crude oil prices have been falling for most of the quarter for most of the quarter due to concerns about a global recession, and they are likely to see their first quarterly decline since 2020, according to Bloomberg.
"The oil price fell this quarter as the risk of a global recession surged, which clearly reflects the easing of demand tension in the oil market," Ed Moya, senior market analyst at Oanda, said in an interview with Bloomberg. “Energy traders obviously expect OPEC+ to take major action.”
“In the face of so much uncertainty, unless we can get more clear information from OPEC+, i.e., about possible scale adjustments and previous missed quotas, there may be a lot of trading when prices rise and fall next week,” another senior oil analyst at Oanda said in an interview with Reuters . In terms of
OPEC, oil prices in the fourth quarter seemed to show signs of upward trend. First, there were reports earlier this week that Russia would propose a 1 million barrels per day cut. It was subsequently reported that several large producers of OPEC+ have begun to discuss production cuts.
Although OPEC+'s oil production cuts will help fight economic pessimism, since OPEC+'s actual output is far lower than its target output, it may not be able to maintain the effect of production cuts: its actual output in August is more than 3 million barrels/day lower than its target output.
In other words, regardless of the official production target, the actual output is often much lower, which makes the production target setting meaningless. However, OPEC officials have been warning that global oil supply is tight and that oil supply may become even tighter after the EU embargo on Russian maritime oil took effect in December.
Real demand disruption seems to be the only way to ease oil prices, and the surge in the US dollar has pushed oil prices down (although this may be just a chance). Earlier this month, the dollar rose to its highest point in two decades, while oil prices fell to its lowest point in eight months, heightening concerns about a recession.
Original author: Irina Slav
Translator: Zhang Ningning
Reviewed by: Yao Chengjuan
Edited by: Wang Wei
