The hottest oil price is still subject to weak fun

2022-09-21
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Oil prices are still subject to weak fundamentals

after the New Year holiday, the benchmark crude oil price continued to rise modestly. Platts' analysis shows that the natural gas dispute between Russia and Ukraine stimulated the continuous recovery of the middle distillate oil price in the United States, thus driving the crude oil price to strengthen again

the dispute between Russia and Ukraine over natural gas supply continued to boost the bullish state of the oil market. For example, with the gradual decline of natural gas inventories, European countries that rely on Russian natural gas supply will eventually have to switch to fuel oil and heating oil. In response to allegations that Ukraine embezzled natural gas from transit pipelines, Russian Prime Minister Vladimir Putin ordered Russian gas giant Gazprom to immediately reduce the supply of natural gas to Europe through Ukraine. This news has kept oil prices rising

at the beginning of this week, Putin ordered Gazprom, a natural gas giant, to reduce its gas transmission to Europe, bringing about a new change in the deadlock between Russia and Ukraine. Earlier, Gazprom said that Ukraine had refused to deliver an additional 15million cubic meters/day of natural gas to its European customers to compensate for the reduction in supply caused by Ukraine's misappropriation of Russian transit natural gas. Gazprom said that Ukraine embezzled 25million cubic meters of Russian natural gas on January 4

for Ukraine, Naftogaz said, "this is a threat to the energy security of Ukraine and Europe, and may have unpredictable consequences for the natural gas transmission network of the whole Europe." Naftogaz asked Gazprom to stop "manipulating" the gas transmission network and coordinate its operations in Russia, Ukraine and the European Union

in order to compensate for the reduced supply, Gazprom said that it had increased the gas supply through the Yamal peninsula Europe Pipeline by 20million cubic meters/day, the gas supply through Belarus to Poland by 6million cubic meters/day, and the gas supply through the "Blue Stream" pipeline to Turkey by 6million cubic meters/day

a delegation from the European Union met with representatives of Gazprom on Tuesday (January 6) to discuss the supply dispute with Ukraine, which highlighted Europe's heavy dependence on Russian natural gas supply. Analysts expect that European industrial users will begin to be affected by the reduction in supply in just a few days

oil prices also reacted strongly to Israel's recent military operations in the Gaza Strip. On Sunday, tens of thousands of Israeli soldiers fought with Hamas militants in a region, not limited to one, in order to end the rocket attacks by militants on Israel. The death toll has exceeded 500. At present, the tension between Israel and Hamas will also lead to an escalation of short buying, which has further pushed up oil prices, because the conflict in the Middle East, which has about 30% of the world's oil resources, usually stimulates the nerves of futures traders. In response to the Israeli Palestinian conflict, Iran this week called on oil producers to cut off supplies to Israel, further exacerbating market uncertainty

meanwhile, the long-term outlook for oil prices remains unclear. On the bearish side, the crude oil price in Iran's budget for the next year is only $37.50/barrel, while U.S. demand continues to shrink. Iranian oil minister nouzari has identified $37.50/barrel as the "reasonable" crude oil price level when Iran determines the budget for the next Iranian calendar year (starting on March 21). Economists predict that Iran will face a budget deficit if the oil price is less than $70/barrel. Iran is the second largest oil exporter of OPEC after Saudi Arabia

in addition, Iraq and Oman also expect oil prices to be relatively weak in 2009. The Finance Committee of the Iraqi parliament has agreed to set the oil price in this year's budget at $50/barrel. Iraq had previously planned to set the 2009 budget oil price at $62.50 per barrel. Oman has set the average oil price in this year's budget at $45/barrel, and the production is 805000 barrels/day

finally, a recent Bloomberg survey on oil price forecasts shows that the average price of crude oil futures this year may be about $60/barrel, compared with about $100/barrel in 2008 (to be exact, $99.68/barrel). On the other hand, although the estimated oil price in 2009 is far lower than the average level in 2008, it is also significantly higher than the current level

for now, more news shows the fundamentals of weak demand in major consumer countries, supporting the bearish outlook. In the latest weekly report, master card advisors said that the further decline in gasoline prices still could not stimulate the increase in demand, and the four week moving average of gasoline retail in the United States decreased by 3% year-on-year. From a broader perspective, the Financial Times reported over the weekend that the American Institute of Supply Management (ISM) survey showed that the U.S. manufacturing industry contracted at the fastest rate in nearly 30 years in November, and new orders fell to the lowest level since the survey began in 1948

in contrast to the bad news, as the market expectation is only different from the polyolefin system additives commonly used in plastics, the supply will be tightened after OPEC implements the recently announced production reduction, and the WTI forward price curve has moved to a higher level in recent weeks. Take the February contract as an example. As of January 2, its price was $46.34/barrel, soaring by $8.63/barrel in the past week

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