(Finance and Economics) International oil prices "rebound", the energy game tends to "white-hot"?
China News Agency, Beijing, October 10th: International oil price "rebounds" and the energy game tends to be "white-hot"?
Author Liu Wenwen
After several weeks of downturn, international oil prices finally ushered in a big rebound.
Last week, international oil prices out of the "five-straight" market.
Among them, New York oil prices rose by 16.54%, and Brent oil prices rose by 11.32%, both hitting the biggest weekly gains in seven months.
China also ushered in a price adjustment window on the 10th.
The National Development and Reform Commission said on the same day that the gasoline and diesel prices will not be adjusted this time, and the next price adjustment window will open at 24:00 on October 24.
Why did the international oil price rebound from a "low" level, and where will this energy game go?
'OPEC+' massive production cuts boost markets
The sharp rise in international oil prices this time was mainly affected by the decision of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing countries to significantly reduce production.
The 33rd "OPEC+" ministerial meeting held on October 5 decided to cut its crude oil production by 2 million barrels per day from November 2022.
In recent days, under the wave of global interest rate hikes, investors have become more worried about the economic outlook, and oil prices have suffered a severe setback.
In order to curb the downward trend in oil prices, "OPEC+" decided at a ministerial meeting on September 5 to cut production by 100,000 barrels per day in October.
At the meeting on October 5, it even announced the largest production reduction plan since 2020, which is equivalent to 2% of the total global oil demand.
The news of production cuts has greatly boosted the international crude oil market, and crude oil prices have swept away the previous haze and walked out of a five-day rally.
Affected by this, many institutions are optimistic about the crude oil market.
Morgan Stanley raised its first-quarter 2023 forecast for Brent to $100 a barrel after OPEC+ announced production cuts.
UBS believes the oil market is expected to tighten further, with Brent rising above $100 in the coming quarters.
Goldman Sachs raised its fourth-quarter Brent forecast by 10% to $110 a barrel.
U.S. says 'disappointed'
In the past year, the United States has been committed to "cooling down" oil prices in order to ease inflationary pressures.
According to statistics from the American Automobile Association, the average price of gasoline in the United States has rebounded by more than 5% in the past two weeks, which has deeply pressured the United States.
The White House issued a statement saying that U.S. President Biden was disappointed by the "short-sighted behavior" of the "OPEC+" oil production cut decision.
The U.S. Department of Energy will release 10 million barrels from the Strategic Petroleum Reserve in November.
In this regard, Xi Jiarui, a crude oil analyst at commodity information agency Jinlianchuang, analyzed that since the beginning of this year, the continuous release of strategic oil reserves in the United States has restrained the trend of oil prices to a certain extent, but its effect is not very obvious, and even far weaker than raising interest rates. effect.
And the release of 10 million barrels released this time is still part of the plan at the beginning of this year, so it has limited restraint on the crude oil market.
The energy game is "white-hot"
International oil prices have been sluggish for a long time, and it is not easy to usher in a "big rebound" this time.
Xi Jiarui's analysis pointed out that the crude oil market has been in a deep decline for nearly four months, from nearly $130 a barrel all the way down to $80, making the market urgently need a major positive news to boost the overly decadent market.
And "OPEC+" announced a large-scale production cut at this time, which is the trigger for the rebound in the oil market.
After the "low" rebound of international oil prices, what will be the future trend?
Yang Hui, chief analyst of energy and chemical industry of Huachuang Securities, pointed out that from the perspective of actual production, OPEC’s production continued to fall short of the quota in the early stage, so the production reduction required is much smaller than the quota adjustment. With a strong boosting effect, the game in the energy field has entered a "white-hot stage".
"The large-scale production cut of 'OPEC+' marks a complete split between the United States and oil-producing countries, and this will have a profound impact on the crude oil market." Xi Jiarui further said: "Contrary to the United States, oil-producing countries hope that oil prices can stabilize Above $90 per barrel, to maintain higher interest, so the international oil price has the power to maintain this price in the short term, and is expected to rise further, and Brent crude oil is expected to hit the $100 per barrel price next week.”
But in the long run, analysts pointed out that if the pace of global interest rate hikes accelerates, it will reignite market concerns, and international oil prices will still face greater upward resistance.
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