According to news from the financial sector on December 15, the International Energy Agency expects that the new crown Omi Keron mutant strain will hinder the recovery of crude oil demand. Crude oil futures fell under pressure and hit the lowest close in more than a week.
West Texas Intermediate crude oil for January delivery on the New York Mercantile Exchange fell 56 cents to close at US$70.73 per barrel, a 0.8% drop, after hitting a low of US$69.51 during the session. ICE European Futures Exchange’s global benchmark Brent crude oil February futures fell 69 cents to $73.70 per barrel, a 0.9% decline. According to data from Dow Jones market data, the near-month delivery prices of West Texas Intermediate (WTI) and Brent (Brent) crude oil futures contracts both hit their lowest levels since December 6 last year.
Tyler Richey, co-editor of Sevens report Research, said: “This is the market’s hawkish and safe-haven response to the producer price index.” The US government announced on Tuesday that the producer price index (ppi) rose by 0.8% last month, exceeding expectations. .
At the same time, a pessimistic report from the International Energy Agency shows that the global oil market has become surplus, and more and more governments and large companies are implementing stricter COVID-19 policies, which have put pressure on the energy market.
In its monthly report, the Paris-based International Energy Agency lowered its 2022 supply forecast for non-OPEC oil-producing countries by 100,000 barrels per day, and lowered its demand forecast by the same amount. The agency said it expects the surge in global new crown cases will hinder economic recovery.
Schneider Electric Global Research and Analysis Manager Robbie Fraser said: “The possibility of oversupply in the next quarter is increasing. The International Energy Agency announced that there is an oversupply situation in the current market, mainly because the Omi Keron mutant strain reduces travel demand. Although most markets have recovered from the huge losses after the discovery of the Omi Keron mutant strain, air travel is still particularly sensitive, and the new mutant strain is still the main risk next year.”
Oanda analyst Craig Erlam said in a report: “If central banks increase risk appetite this week, we may see (oil prices) rise further, but in the end the epidemic data will be the key. Politicians are obviously worried. The speed of transmission, further restrictions may bring pressure. But traders will be very clear that any decline in this area may trigger a sudden adjustment of OPEC+.”
Central banks have also received attention. The Fed is expected to speed up the reduction of monthly bond purchases on Wednesday in preparation for raising interest rates next spring.
Richey of Sevens Report Research said: “If the Fed is tougher than expected at this week’s policy meeting, or Omega’s news gets worse, oil prices may easily collapse and test the recent lows again. But. If fears about the pandemic begin to ease and the Fed moderately accelerates the reduction of quantitative easing, and reiterates that it will not start raising interest rates until later in 2022, then the resulting financial flow risks may drive West Texas Intermediate oil prices Back to our initial upward target of $75/barrel.”
At the same time, the U.S. Energy Information Administration will release weekly U.S. oil supply data on Wednesday. On average, analysts surveyed by Platts Energy Information expect that government data will show that as of the week of December 10, US domestic crude oil inventories fell by 1.7 million barrels. They also expect gasoline inventories to increase by 200,000 barrels, but distillate stocks are expected to decrease by 400,000 barrels.
On the New York Mercantile Exchange, gasoline prices fell 0.3% in January to $2.111 per gallon; heating oil prices fell 0.6% to $2.218 per gallon in January. The settlement price of natural gas delivered in January was US$3.747 per million British thermal units, down 1.2%.
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