Zhuochuang Information
1. Traders are usually reluctant to go short before a long holiday when demand is at its peak.
The market awaits the meeting to be held by OPEC and its allies on June 2.
As the market prepared for the long weekend at the start of the peak of US driving travel, demand stabilized, traders took in bargains, and international oil prices rebounded from a three-month low after continuing their decline in early trading, closing higher for the first time in five trading days. Friday (May 24) New York Mercantile Exchange West Texas light crude oil settlement price for July 2024 futures 77 per barrelPlayingcarddecks.72 US dollars, up 0.85 US dollars, or 1.11%, over the previous trading day, with a trading range of 76.15-78.05 US dollars; London Intercontinental Exchange Brent crude futures settlement price of 82.12 US dollars per barrel, up 0.76 US dollars, or 0.93%, over the previous trading day, trading range 80.65-82.46 US dollars.
West Texas light crude hit an intraday low of $76.15 a barrel early Friday on the New York Mercantile Exchange, the lowest level since Feb. 26. ICE Brent crude fell to $80.65 a barrel in intraday trading, the lowest level since Feb. 8.
The summer driving season in the United States begins with a long holiday this weekend and ends in early September. Although each so-called long holiday lasts only three days, the number of summer driving trips will increase, and so will the demand for gasoline. Traders are usually reluctant to go short before a long holiday when demand is at its peak, and international oil prices have fallen for four consecutive days to cover short positions.
Before the Memorial Day weekend, the average price at a national gas station was about $3.61 a gallon, about 5 cents lower than the average last month, according to AAA, the American motorists' association. However, the current price is still about 5 cents higher than the average price a year ago. But gasoline prices are 2% lower than last year, taking into account inflation, according to the U.S. Energy Information Administration. The U.S. Department of Energy will sell 1 million barrels of gasoline from emergency gasoline reserves in the northeastern United States by July 4 to prevent gasoline prices from soaring.
While demand is likely to increase, the market is also worried that OPEC and its production reduction allies will continue to reduce production and supply will continue to be limited. According to a message posted on the OPEC website, the 188th meeting of OPEC, the 54th meeting of the Joint Ministerial Monitoring Committee and the 37th ministerial meeting of OPEC and non-OPEC will be held by videoconference on Sunday, June 2, 2024. This means that the semi-annual ministerial meeting of OPEC and its production reduction allies has been postponed by one day and will be held by remote video instead of being held in Vienna on June 1, as originally planned. Analysts generally believe that the meeting will be held online to show that the oil-producing countries involved in the cut agreement have more or less reached an agreement on how to press ahead with the current production cuts.
OPEC and its production reduction allies are currently cutting production by about 2.2 million barrels a day under a production reduction agreement that expires at the end of June, and the alliance will decide at its June 2 meeting whether to extend all or part of the production cuts to the second half of the year. "crude oil prices are close to a three-month low due to signs of weak demand," Saxo Bank said in a market review. The meeting "the most likely outcome is still to extend the current production reduction period."
Tamas Schmidt, an analyst at oil broker PVM (Berkshire Hathaway), said, "Macroeconomic development has not been able to provide meaningful support for oil, and the oil market itself has problems that need to be solved, although an European country has promised to work with it."PlayingcarddecksMembers of his coalition cut production together, but it was still overproduced in April. Next week's meeting of OPEC and its allies on production cuts is widely expected to discuss the current production ceiling, especially as oil prices continue to fall. But that may not be enough to boost sentiment explicitly, as a market that appears to be oversupplied has a supply buffer of nearly 6 million barrels a day. "
According to the International Energy Information Agency, as of April this year, the 22 member states of OPEC and its production reduction allies produced a total of 41.43 million barrels of crude oil per day, with an effective surplus capacity of 5.9 million barrels per day. The countries with more over-quota production are Iraq and the United Arab Emirates each with an excess of 240000 barrels per day, Kazakhstan with an excess of 130000 barrels per day, and an European country with an excess of 200000 barrels per day.
Despite the rebound in international oil prices on Friday, international oil prices fell for the first time in three weeks this week as they fell for four consecutive days. There are fears that persistently high interest rates in the United States could dampen demand growth in the world's largest oil market. In a mixed week of economic signals and inventory reports, traders were uneasy about the near-term outlook for crude oil. Over the past week, the first-month futures of light, sweet crude on the New York Mercantile Exchange fell 2.34 U.S. dollars, or 2.92 percent, to an average settlement price of 78.24 dollars per barrel, down 0.768 dollars from the previous week, with a settlement price of as high as 79.8 dollars per barrel and as low as 76.87 dollars per barrel. Trading range of $76.15-80.60 per barrel. First-month Brent crude futures on the London Intercontinental Exchange fell $1.86, or 2.21%, to an average settlement price of $78.24 a barrel, $4.90 lower than the previous week, with a settlement price as high as $83.71 a barrel and as low as $81.36 a barrel. Trading range $80.65-84.49 per barrel.
The number of oil rigs active by energy companies in the United States is stable, while the number of natural gas rigs is decreasing. According to data released by Baker Hughes, GE's oil field service, AOL drilled 497 wells in the week to May 24, unchanged from the previous week and 73 fewer than the same period last year. The report shows that there are 1 fewer CANA WOODFORD basins in Canaan, 1 less Eagle Ford basins in Texas, 1 more basins in Haynesville, 3 fewer basins in Marcellus, 1 fewer basins in Utica, Ohio, 21 offshore platforms in the United States this week, 1 more than the week before, and 1 more than the same period last year. Baker Hughes data also show that in the same period, the number of natural gas wells in the United States was 99, 4 fewer than the week before, and 38 fewer than the same period last year. Among them, there are a total of 579 oil and gas platforms in the United States, five fewer than the week before and 110 fewer than the same period last year. The total number of oil and gas rigs in the United States is 600, four fewer than the week before, and 111 fewer than the same period last year.