Sally' caused oil companies to stop production, U.S. oil returned to 40 mark

According to data released by the U.S. Energy Information Administration (EIA), U.S. crude oil inventories unexpectedly fell sharply, while Hurricane Sally reduced oil production in the Gulf of Mexico. Oil prices continued the previous trading day’s rise on Wednesday (September 16). Trend: US WTI crude oil October futures closed up 1.88 US dollars or 4.9% to 40.16 US dollars per barrel; Brent crude oil November futures closed up 1.69 US dollars, or 4.2%, to 42.22 US dollars per barrel.

OPEC (OPEC) will hold a ministerial meeting on Thursday to discuss whether the organization's production reduction measures are sufficient to prevent oversupply, and to discuss compliance with the agreement again. Oil prices have been supported by the Abu Dhabi National Oil Company, the UAE's largest oil exporter. The company said it will cut its crude oil exports by 25% in October, and the cut will continue until November. Due to the strong domestic power demand and the need to make up for overcapacity, the UAE's output has exceeded the quota stipulated in the OPEC+ agreement in September. Due to the strong domestic power demand and the need to make up for overcapacity, the UAE's output has exceeded the quota stipulated in the OPEC+ agreement in September.

Fundamental positive factors:

1. On Wednesday, the U.S. Energy Information Administration released data showing that as of the week of September 11, U.S. crude oil inventories decreased by 4.4 million barrels, a figure higher than the analysis conducted by S&P Global Platts (S&P Global Platts) The division’s average expectation of a decline of 1.8 million barrels of crude oil. EIA data also showed that Cushing crude oil inventories fell by 74,000 barrels, gasoline inventories fell by 381,000 barrels, and distillate inventories increased by 3.5 million barrels. The S&P survey shows that gasoline supply is expected to decrease by 7 million barrels, while distillate supply is expected to increase by 500,000 barrels. The American Petroleum Institute (API) announced on Tuesday that crude oil inventories fell last week by 9.5 million barrels. Gasoline inventories increased by 3.8 million barrels, while distillate stocks fell by 1.1 million barrels.

2. Concerns about supply disruption in the United States due to Hurricane Sally provided some support for prices. On Wednesday, local time, Hurricane Sally struck the coast of Alabama in the form of a secondary storm, with a maximum sustained wind speed of 105 miles per hour. The Bureau of Safety and Environmental Enforcement of the United States Department of the Interior estimated on Tuesday night that 26.87% of oil production in the Gulf of Mexico has been shut down, and approximately 28.03% of natural gas production has also been shut down.

3. On Tuesday, the International Energy Agency (IEA) lowered its 2020 crude oil production forecast by 200,000 barrels per day to 91.7 million barrels, saying it was cautious about the pace of economic recovery. The IEA stated in its monthly report that the global oil market outlook has become “more fragile” as the return of the new crown epidemic has derailed the demand recovery. The IEA, which provides advisory services to major economies, has lowered the price for the rest of the year. Demand is expected, and crude oil inventories, which are expected to have rebounded to record levels in July, will not fall sharply as previously expected.

Fundamental negative factors:

1. The new crown epidemic continues to spread. According to real-time statistics from Johns Hopkins University in the United States, as of 00:59 on September 17, Beijing time, there were 29.62 million confirmed cases of the new crown virus worldwide, 29,628,650, and 930,000 deaths, 936,377. . Among them, the number of confirmed cases of the new coronavirus in the United States reached 6.6 million, or 6,603,033; the number of deaths reached 190,000, or 19,147.

2. On Monday, OPEC released its monthly report. It believes that due to weak demand and recovery of shale oil production, the outlook for oil prices will weaken. It lowered the forecast for global economic growth in 2020 from -4% to -4.1%, and forecasted world oil demand in 2020 Will be reduced by 9.46 million barrels per day, which was previously predicted to decrease by 9.06 million barrels per day. Maintain the global economic growth forecast for 2021 at 4.7%, and increase the 2021 non-OPEC country oil supply growth forecast from 371,000 barrels per day to 1 million barrels per day. In July, the OECD oil inventory was five years higher The average level is 261 million barrels. The impact of the epidemic remains challenging and requires coordinated policy actions by all market participants, including OPEC.

3. British Petroleum (BP) stated in its latest report on Monday, Energy Outlook, that oil consumption may never return to the level before the outbreak of the pandemic crisis, believing that the era of increasing oil demand is over. Even the most optimistic forecast of the company believes that as the energy transition frees the world from dependence on fossil fuels, oil demand in the next 20 years will not be much better than "roughly flat."

Agency Comments:

Robert Yawger, head of the energy department of Mizuho Securities, said in a report: "Crude oil prices are soaring due to the unexpected sharp drop in API crude oil inventories, the reduction in crude oil production caused by Hurricane'Sali', and OECD The global oil price forecast has been adjusted positively from -6.0% in June to -4.5%."

Harry Tchilinguirian, Head of Commodity Market Strategy at BNP Paribas SA, said: "The upward momentum in the oil market this morning was mainly driven by the unexpected drop in US crude oil inventories." "The global economic recovery will continue, although the recovery is uneven. If OPEC continues to cut production, the market will rebalance and reduce the excess inventory accumulated in the first half of this year."

Analyst Barani Krishnan said that the current hurricane may cause more power outages, and the data may be distorted in the next one to two weeks. He said: "I warn those who are bullish on oil not to believe these figures. What is certain is that with the end of the peak driving period in the United States and the fact that commuting and flights are still far from reaching pre-epidemic levels, the prospects for fuel demand are not acceptable. Optimistic. The International Energy Agency has lowered its forecast accordingly; OPEC has stated that it will not unilaterally reduce production to support oil prices. If the peace process is maintained, Libya may add another 1 million barrels of crude oil to the market."