EIA crude oil inventories unexpectedly fell by 2 million barrels, US oil jumped $0.4 in short-term

EIA crude oil inventories unexpectedly drop

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Specific data show that the U.S. EIA crude oil inventory changes in the week ended November 12 actually announced a decrease of 2.101 million barrels, an expected increase of 1.2 million barrels, and an increase of 1.002 million barrels from the previous value.

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In addition, the U.S. EIA gasoline inventories actually announced a decrease of 707,000 barrels in the week ended November 12, an expected decrease of 750,000 barrels, and the previous value decreased by 1.555 million barrels; the U.S. EIA refined oil inventories actually announced a decrease of 824,000 barrels in the week ended November 12 barrels, an expected decrease of 1 million barrels, a decrease of 2.613 million barrels from the previous value.

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The EIA report showed that U.S. crude oil exports rose by 573,000 barrels per day last week to 3.626 million barrels per day. The four-week average supply of U.S. crude products was 20.187 million bpd, up 3.9% from a year earlier. U.S. domestic crude production fell by 100,000 barrels to 11.4 million barrels per day last week.

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The EIA report showed that commercial crude oil excluding strategic reserves imported 6.191 million barrels per day last week, an increase of 83,000 barrels per day from the previous week. Commercial crude oil inventories excluding strategic reserves fell 2.101 million barrels, or 0.5%, to 433 million barrels.

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The EIA report showed that the U.S. EIA Cushing, Oklahoma, crude oil inventories increased by 216,000 barrels in the week to November 12, the first increase in inventories since the week of October 1. U.S. crude oil exports in the week to Nov. 12 were the highest since the week to July 9, 2021. U.S. EIA crude oil inventories fell by the most in the week to November 12 since the week to September 17, 2021.

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EIA crude oil inventories unexpectedly fell by 2 million barrels, US oil jumped $0.4 in short-term

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OPEC sees global oil glut as soon as next month

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The Organization of the Petroleum Exporting Countries (OPEC) said the global oil market will go from undersupplied to oversupplied as soon as next month as the post-pandemic economic recovery stalls.

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OPEC Secretary-General Mohammad Barkindo said the outlook meant that it was reasonable for OPEC to increase production only at a modest pace. The comments reiterated that OPEC and its partners will continue to resist U.S. pressure to accelerate output increases and will stick to earlier tactics at their meeting early next month.

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Barkindo told reporters in Abu Dhabi on Tuesday that the recovery is very fragile, and these uncertainties further strengthen our resolve to hold the steering wheel.

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OPEC and its allies - the 23-nation coalition led by Saudi Arabia and Russia - will be very cautious about raising output, Barkindo said. He echoed comments made by Saudi Energy Minister Abdulazizbin Salman, who said this week that oil inventories will start to rise again next month.

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Barkindo said that we have seen inventory recovery for six consecutive weeks, and our decisions are driven by data and must be very cautious.

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IEA sees oil price rally coming to an end as output recovers

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Tensions in global oil markets that have driven oil prices to seven-year highs have begun to ease as output in places including the United States recovers, the International Energy Agency (IEA) said.

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According to the IEA's monthly report, demand growth remains strong, but supply is catching up, and changes in oil inventories in October suggest "the trend may be turning." If the prediction is correct, it will bring great comfort to consumers who have been hit by rising prices.

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The IEA said in its monthly report that world oil markets remain tight by all measures, but that a moderation in price increases may already be in sight, with U.S. production rising along with the rise.

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Refiners around the world will process 80 million barrels a day of crude this month, up nearly 3 percent from October and well above the rate in the first three quarters of the year, according to the Paris-based consultancy for energy-consuming countries. quarterly average. Next month, processing is expected to increase by another 800,000 barrels per day.

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To a certain extent, refinery equipment maintenance ends at this time of year, so the increase in crude oil processing is expected. However, inventories of refined products are expected to fall this quarter despite higher crude processing, according to the International Energy Agency. This suggests that the supply and demand situation will not deteriorate significantly in the short term.

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The IEA may look to a longer time horizon to support its price view. The current main contract of Brent crude oil futures is the January contract, and the largest open interest in West Texas Intermediate (WTI) is also the January contract. Several agencies, including the International Energy Agency, predict that by then, if OPEC+ producers increase production as planned, oil production will begin to exceed demand.

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Global oil production rose by 1.4 million barrels a day last month and is set to rise again in November and December as supplies in the Gulf of Mexico resumed after Hurricane Ida resumes. U.S. shale drillers are also taking advantage of rising prices to boost output. The IEA said these additional production would come to the market one after another as OPEC+ continued to resume exports that had been suspended during the pandemic.

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Even without the deployment of the Strategic Petroleum Reserve, the U.S. is leading the rebound in supply. The IEA raised its forecast for U.S. fourth-quarter production by 300,000 barrels a day and raised its forecast for next year by 200,000 barrels. U.S. production will increase by 1.1 million barrels per day in 2022, accounting for 60% of the increase in output outside OPEC+. The global overall supply and demand forecast for this year and next will remain basically unchanged.

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The market expects the United States to release strategic crude oil reserves, putting pressure on the short-term trend of oil prices

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Biden is facing increased pressure from party members to release oil from the Strategic Petroleum Reserve (SPR) to suppress rising oil prices.

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IHS Markit energy market analyst Marshall Steeves (Marshall Steeves) said crude oil futures sold off amid expectations that the Biden administration may consider the release of strategic crude oil reserves and a possible U.S. ban on crude oil and gasoline exports. U.S. Senate Leader Chuck Schumer, a Democrat, pushed for the release of the Strategic Crude Oil Reserve over the weekend.

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Schumer said on the 14th that with the shopping season approaching, the Biden administration should release the strategic crude oil reserve to reduce gasoline prices. Steves believes that the release of the strategic crude oil reserve is likely to be the most likely scenario. Still, the impact will be short-lived, as the release of crude oil from the strategic reserve accounts for only a tiny fraction of global production and consumption. Also, this will be a one-time event, not a continual increase in production. It is likely that the push to release the strategic crude oil reserve is politically motivated, allowing for a brief dip in prices during the shopping season.

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Earlier in the day, expectations that the Biden administration might release strategic crude oil reserves to fight inflation weighed on oil prices, but market skepticism about the U.S. operation led to U.S. Crude oil futures were higher. According to Kilduff, market prices appear to have reacted too aggressively to the potential release of the U.S. strategic crude oil reserve.

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RystadEnergy analyst Louise Dickson (Louis Dickson) said that the market appears to be less concerned about the current tight supply, and traders are focusing on the re-emergence of other bearish factors, namely the possible increase in oil supply and a rebound in the number of new crown virus infections.

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If SPR is not released, oil prices will continue to rise. Rebecca Babin, a senior energy trader at CIBC Private Wealth Management Company, said that at the current point in time, the market has already priced most of the release of crude oil reserves. Over time, if crude oil reserves are not released as expected, oil prices may rise sharply. .

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Saudi Arabia and the United Arab Emirates said OPEC will continue to carefully plan output increases as the United States considers unleashing crude supplies. The group is increasing output by 400,000 barrels per month, but so far no OPEC member has actually produced that level, according to the documents.

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Oil prices surged to multi-year highs as the economy recovered and the global energy crisis boosted demand for oil. OPEC and its allies are more concerned about the level of stability in demand in the coming months. Gasoline prices have hit a seven-year high as the Biden administration considers opening up crude oil reserves, which could affect Democrats whose approval ratings are dwindling.

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Gasoline prices in California, the most populous U.S. state, hit a record high on Monday, according to the AAA. Even Democratic senators who are concerned about climate change have urged the president to act quickly to rein in oil prices by using the SPR or banning U.S. crude exports.

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OPEC+ resists U.S. calls to increase output, supports oil prices

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According to reports, Saudi Arabia and the United Arab Emirates said that OPEC+ will continue to increase crude oil production cautiously and will not succumb to pressure from the United States to increase production.

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It is reported that U.S. President Biden had previously called for OPEC+ to increase production to reduce crude oil prices due to concerns that gasoline prices at the highest level in seven years will increase inflation in the United States. But OPEC+, led by Saudi Arabia and Russia, continued to increase capacity by 400,000 bpd per month.

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"The 400,000 barrels per day (bpd) increase in production capacity continues to be maintained, which should be sufficient," UAE Energy Minister Mazrouei said at the Adipec Oil and Gas Conference in Abu Dhabi.

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Mazrouei said that the crude oil market will turn from a shortage to a surplus early next year, which is one of the main reasons why OPEC+ is not actively supplying. "What we know, and what all the experts around the world are saying, is that there will be a supply glut going forward. So we need to be calm," he said.

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Saudi Energy Minister Abdulazizbin Salman agreed. He said the crude oil market was quieter relative to the coal and natural gas markets. Coal and natural gas prices have surged to record highs last month.

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But Abdulaziz pointed out in an interview,"The crude oil market is not responsible for energy shortages. Energy market volatility comes from other energy sources, and it is much more volatile."

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In addition, since the outbreak of the epidemic in early 2020 and OPEC+ began to cut production sharply, crude oil inventories have fallen rapidly. But Abdulaziz said that number will pick up from next month. OPEC+ is fulfilling its responsibilities to the oil market.

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Finally, Oman's Energy Minister Mohammed Al-Rumhy also said that OPEC+ does not need to accelerate production increases. He noted that the group may decide at its December meeting to continue to increase production by 400,000 barrels per month.