[Crude oil closing]Iranian tensions helped fuel prices rebound on Friday, and U.S. oil rose nearly 5% this week.
U.S. WTI crude oil August futures closed up $0.01, or 0.1%, at $60.21 a barrel on Friday (July 12), up 4.7% this week, the highest closing price since May 22. Brent crude oil September futures closed up $0.20, or 0.3%, at $66.72 a barrel on Friday, up 3.9% this week, the highest closing price since May. Tensions in Iran and the tropical storm climate in the United States have provided effective support for oil prices, while dollar pressures have increased the upward space for oil prices. WTI crude oil futures in the United States hit a high of $60.74 per barrel and Brent crude oil futures hit a high of $67.29 per barrel.
Fundamental positive factors:
According to data released by Baker Hughes on Friday (July 12), the number of active oil drilling wells in the United States dropped by 4 to 784 in the week ending July 12, falling for two consecutive weeks and touching a new low since February 2018. The number of active drilling wells in the United States decreased by 7 in June, the largest monthly decline since May 2016 and 5 in May. As U.S. oil companies began to reduce construction of new drilling wells, they turned their attention to profit growth rather than production growth. At the same time, it is also the longest monthly decline cycle since May 2016, when it recorded a decline for nine consecutive months.
U.S. Treasury Secretary Nouchin warned that the U.S. could hit the debt ceiling in early September. After the news came, the decline of the dollar index accelerated. The U.S. PPI annual rate in June, announced earlier in the day, reached its lowest level in nearly two and a half years. With the Federal Reserve releasing a strong interest rate cut signal, the voice of short dollar in the market is gradually ringing, and many institutions expect the future of the dollar is not optimistic.
Tensions in the Middle East continue to attract investors,attention. A Royal British Petroleum Company (BP) tanker was intercepted by three Iranian ships as it crossed the Strait of Hormuz after the British seized an Iranian tanker recently, but they were evacuated at random after British warships issued warnings. This keeps tensions in the Iranian region warming up, fearing to affect future market trends.
Local oil producers have cut oil production by nearly a third as the first Atlantic hurricane off the coast of Mexico approaches this summer. According to the latest news from the National Hurricane Center, Tropical Storm Barry will bring dangerous storm surges to the north-central coast of the Gulf of Mexico.
The U.S. Energy Information Agency (EIA) reported Wednesday (July 10) that crude oil stocks in the U.S. had fallen by 94.99 million barrels to 459 million barrels in the week ending July 5, with a market forecast of 35.67 million barrels. More data showed that Kuxin crude oil stocks in Oklahoma fell by 310,000 barrels last week. U.S. gasoline inventories fell by 1.455 million, down for four consecutive weeks, with a market forecast of 123.3 barrels.
Fundamental bearish factors:
The International Energy Agency (IEA) released its latest monthly report on Friday (July 12) pointing out that the global crude oil market is expected to return to the plight of oversupply next year, even if the Organization of Petroleum Exporting Countries (OPEC) announces an extension of production cuts. IEA data show that in the first six months of this year, global crude oil supply exceeded demand by 900,000 barrels per day, which further increased the huge inventory level accumulated since the second half of 2018. Neil Atkinson, head of IEA,s crude oil industry and market, said the crude oil market "will have considerable oversupply in 2020 because crude oil production in the United States and other parts of the world is still rising". At the same time, in 2020, the global crude oil production of non-OPEC oil producing countries will increase by 2.1 million barrels per day, most of which comes from the United States, about 2 million barrels per day, thus reducing the market demand for OPEC crude oil.
In its monthly report, OPEC issued its first forecast for 2020, believing that the market demand for OPEC crude oil next year will be 29.27 million barrels per day, down 1.34 million barrels per day from this year. At the same time, it pointed out that even if the organization extended the cut-off agreement, the problem of excess supply in the oil market will return, which will cast a shadow on the future of oil prices.
The U.S. Energy Information Agency (EIA) released a report Wednesday (July 10) showing that as of July 5, refined oil stocks in the United States had increased by 3.729 million barrels, registering two consecutive weeks of growth, and the market forecast an increase of 1.433 million barrels. In addition, U.S. domestic crude oil production increased by 100,000 barrels to 12.3 million barrels per day last week, recording two consecutive weeks of growth.
The International Energy Information Agency (IEA) believes that the economic sanctions imposed by the United States and the oil tanker attack in the Middle East will only add limited uncertainty to the oil market, but it expects the growth of global crude oil supply except OPEC to reach 2.3 million barrels per day next year, which will be much higher than the 1.4 million barrels per day increase in demand. At the same time, the IEA pointed out that China and other countries,economic stimulus policies should support demand, but we must pay attention to "the tension of Global trade relations".