August 30 (Tuesday) at the beginning of the Asian market, U.S. oil trading was around $96.75 per barrel, and oil prices rose more than 4% on Monday, continuing last week's rise, as OPEC+ may reduce production and Libya conflicts helped offset the impact of the strong dollar and bleak US economic growth prospects.
html focuses on the US JOLTs job openings in July and the US Consulting Chamber of Commerce consumer confidence index within 4 days; API data was released at 4:30 on Wednesday.
Positive factors affecting oil prices
[OPEC production cut prospects drive oil prices to rise]
The largest producer of the Organization of Petroleum Exporting Countries (OPEC), Saudi Arabia proposed the possibility of production cuts last week. Sources said that if Iran reaches a nuclear agreement with the West, the production cuts may coincide with the increase in Iran's supply. OPEC+, composed of OPEC and other oil-producing allies such as Russia, will meet on September 5 to formulate policies. "Oil prices are gradually rising because people want OPEC and its allies to cut production to restore market balance and respond to the recovery of the Iran nuclear deal." Tina Teng, analyst at
CMCmarkets, said: "Although the strong dollar has overall suppressed the price of commodity , insufficient supply in the oil market may continue to support the upward trend." Riots in
HD over the weekend in Libyan capital , causing 32 deaths, which raises concerns that the country may have a full-scale conflict, resulting in disruption in crude oil supply in this OPEC country.
[Crude oil inventories in the U.S. emergency reserves fell to their lowest since December 1984]
Data from the U.S. Department of Energy shows that as of the week ending August 26, crude oil inventories in the U.S. emergency reserves fell by 3.1 million barrels, the smallest release scale since the end of April. The data also showed that strategic oil reserves (SPR) inventories fell to 450 million barrels, the lowest level since December 1984.
[IAEA report says Iran is increasing its efforts to carry out uranium enrichment activities in underground factories]
A report by the International Atomic Energy Agency (IAEA) seen by Reuters shows that Iran is promoting the upgrade of its advanced uranium enrichment program. Currently, Western countries are waiting for the country's reply to the text of the compromise agreement proposed by EU to save the 2015 nuclear agreement. The first of the three advanced IR-6 centrifuge cascades recently installed at the underground nuclear fuel enrichment plant (FEP) in Natanz, the latest underground plant to enrich uranium using these advanced equipment.
negative factors affecting oil prices
[IEA Director says Russian oil production exceeds expectations but pressure gradually rises, member states can release more reserves]
Director of the International Energy Agency (IEA) Birol said on Monday that after the Ukrainian war, Russia's oil production exceeded expectations, but as Western sanctions begin to take effect, Russia will find it increasingly difficult to maintain production. "It will be much harder for Russia to maintain production without (Western) companies, without technology suppliers, without service companies."
Birol said Russia's domestic demand has remained strong to date and the country has also offered large discounts to non-European buyers.
He added that IEA members can release more oil from the Strategic Oil Reserves (SPR) when the current release plan expires in November. "We still have a large inventory at our disposal. If our member states believe that it is necessary to release stocks due to supply disruptions, I believe (they) will consider (do this), it is not impossible."
earlier than Rohr said that as Russia's gas storage saturates, it is expected that Russia's gas removal will increase in the next few months as Russia's gas storage is saturated. He said that after the invasion of Ukraine and the reduction of natural gas exports, the world's trust in Russia as an energy supplier has been weakened, and the loss of this partner in Europe will hurt Russia.
Birol said the upcoming winter will be a test of European solidarity. If the continent fails when it comes to the test, its impact may "beyond this energy crisis ."
[ Fed aggressive interest rate hike concerns lingering US stock closed lower]
US stocks closed lower on Monday, continuing last week's sharp drop due to lingering concerns that the Fed is still determined to raise interest rates aggressively in the face of a slowdown in the economy. Federal Reserve Chairman Powell said last Friday that the U.S. economy will need "a period" of tightening monetary policy before inflation is under control, and hopes of a more moderate rate hike will be dashed after recent data suggests inflation pressures are peaking.
S&P 500 rebounded from an intraday low, which fell 1% at one time intraday, the lowest in a month, but the index still hit its biggest two-day percentage drop in two and a half months.
Charles Schwab's vice president of trading and derivatives said, "Frankly, the big drop last Friday was too much, I know (Powell) said he was going to take a tough stance on inflation, but to be honest, that's not much different from what he said in the past few weeks, his attitude is a little more hawkish, but I mean, my god, who would be surprised by it, is there any Get it wrong? I don’t expect a big rise or fall in the short term. I expect the market trend to be very fluctuating, at least before the interest rate hike on September 21. "
As Treasury bond yield rises, large technology stocks and growth stocks became the biggest factors that dragged the index, with Apple falling 1.37%, and Microsoft falling 1.07%. Wall Street Panic Index--CBOE Volatility Index reached a seven-week high of 27.67 points.
Money market traders believe that the probability of a 75 basis point hike at the Fed's September meeting is 72.5%, which will be the third consecutive rate hike at such a scale. They expect the Federal Reserve's federal funds rate to reach around 3.7% by the end of this year.
The two-year Treasury yield, which is particularly sensitive to interest rate expectations, briefly hit a 15-year high, while the highly-watched part of the yield curve - the two-year/10-year Treasury yield curve is still seriously inverted. Many people believe that inversion is a reliable signal that the recession is approaching.
The highlight of this week's economic data is the August non-farm employment report that will be released on Friday. Any sign of a slowdown in the labor market could ease the pressure on the Fed to continue to raise interest rates sharply. The S&P 500 climbed nearly 11% from mid-June to Friday's closing. The index recently found support above the 50-day moving average , but is still well below its 200-day moving average. Despite the rebound, some investors are still worried as September approaches, as stocks usually performed weakly in September, coupled with the expectation of the Fed rate hike that month.
[Ukraine's Ministry of Energy predicts that the gas consumption in Ukraine will decrease by 40% compared with last year]
Ukraine's Post of Truth reported on August 29 local time that the Ukraine's Ministry of Energy predicts that the gas consumption in Ukraine's 2022-2023 heating season will decrease by 40% compared with last year. Yaroslav Zheleznyak, vice chairman of the Ukraine Supreme Lada (Parliamentary) Tax Committee, said that Ukraine's gas consumption is expected to be about 11.7 billion cubic meters in autumn and winter, compared with that, the gas consumption in the last heating season was about 19.4 billion cubic meters.
Overall, crude oil inventories in the U.S. emergency reserves have dropped to a new low in nearly 40 years, and insufficient supply boosts oil prices; and OPEC+ may reduce production and conflict with Libya, oil price bulls are strong and may approach the 100 mark in the short term.
This article is from Huitong.com
