[Energy people are watching, click on the upper right corner to add 'Follow'] New York: New York oil prices hit a year-on-year high, and continued restrictions on producer supply will help stimulate the spot market and the strong futures curve. Last Friday, New York futures price

[Energy people are watching, click on the upper right corner to add 'Follow']

New York: New York oil prices hit a year-on-year high, and the continued restrictions on producer supply will help stimulate the spot market and the strong futures curve.

Last Friday, New York futures prices rose 1.1%, reaching their highest level since the end of January 2020, while London Brent crude oil prices remained slightly below $60 per barrel . The number of ships heading to China jumped to a six-month high last Friday, indicating that China, as the world's largest oil importer, may be re-influxing into the oil market. Meanwhile, data from data analytics company OilX shows that China's crude oil inventories linked to oil futures fell to their lowest levels since June 2020, indicating a decline in stocks.

This week, the Organization of Petroleum Exporting Countries (OPEC, referred to as OPEC) and its allies promised to continue to consume oil surplus caused by the new coronavirus, a move boosted crude oil prices. At the same time, although lockdown measures limit flows, expectations for a global economic recovery this year have also raised forecasts of stronger oil demand. Meanwhile, more funds are flowing into the sector as investors' holdings of West Texas Intermediate crude futures soar to their highest levels since 2018.

Vikas Dwivedi, a global energy strategist at Macquarie Group in Houston, said: “There will be bumpy on the road, but we know the end result is that we are moving in a more normal direction. demand bottoms out, supply remains within a controllable range, and macro factors such as stock markets, inflation potential and the US dollar are pushing more capital into the oil sector. ”

The reason why oil prices climb to a one-year high is that the futures curve is moving sharply towards a bullish spot premium structure. The key premium for the latest December contract of West Texas Intermediate crude oil was higher than the following December, reaching its highest level in a year. Exchange data compiled by Bloomberg shows that in the options market, it is generally believed that the curve will further expand to spot premium by the end of the year.

Meanwhile, Royal Dutch Shell Plc set off a snap-up in the North Sea market earlier this week, which snapped up the largest number of S&P Global Platts refined oils since at least 2008.

Stewart Glickman, an energy stock analyst at CFRA Research, a well-known U.S. investment bank, said: " OPEC has followed their promised production cuts well, which was not expected in the past. With Saudi help, they seem to stick to a tough route in terms of output ."

However, we also have reasons to be cautious. According to top trading company Gunvor Group Ltd., the oil price of $60 per barrel will increase oil supply and curb further price increases. The average price of West Texas Intermediate crude oil is about $55 per barrel for the rest of the year and will exceed $50 per barrel next year, a price level that may stimulate producers to increase oil production. "We will raise prices, which may encourage production growth. Producers appear to have partially returned to their optimism about the oil market ."

But for now, there are signs that oil prices will continue to strengthen as Saudi Aramco, despite expectations of rate cuts, kept Asian oil prices unchanged in March and raised pricing for Europe and the United States.

Disclaimer: The above content is reproduced from energy public opinion, and the content posted does not represent the position of this platform.

National Energy Information Platform Contact number: 010-65367702, Email: [email protected], Address: People's Daily, No. 2, Jintai West Road, Chaoyang District, Beijing