Influenced by the news that the organization of Petroleum Exporting Countries (OPEC) may extend the production reduction agreement, the international oil price once rose to the highest level in two months in a week, and then fell slightly.
OPEC and its partners may extend the agreement on production reduction of crude oil, which expires at the end of March next year, to June 2020, the media quoted anonymous OPEC officials as saying Monday. Although it seems unlikely to increase production reduction now, OPEC and its partners may send a message to the market to strengthen the implementation of the production reduction agreement.
The news stimulated the rise of international oil prices. On September 21, light crude oil futures in New York closed at their highest level since September 17, while Brent crude oil futures in London rose to their highest level since September 3.
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According to the report released by JBC energy of Austria, it is not fundamentally surprising that OPEC anonymous said that the existing production reduction agreement may be extended to June next year. Given OPEC’s repeated willingness to balance the market, existing expectations already take into account OPEC’s agreement with its partners to cut production until the end of 2020.
Phil Flynn, a price futures group, said the market continues to underestimate oil demand. “In fact, oil demand is not only strong, but also this quarter’s growth is better than the previous quarter. With the implementation of multi-national economic stimulus measures and OPEC’s indication that it will extend the production reduction agreement, the whole oil supply system may be under supplied. ” He said.
JBC energy expects that the growth rate of global oil demand in the first three quarters of this year is only 460000b / D, which may be further reduced after relevant data from Canada and the United States are released. However, due to the low base in the same period last year, the year-on-year growth of global oil demand in the fourth quarter is still expected to reach 1.2 million barrels / day.
In addition, the new IMO fuel oil regulations for ships have resulted in insufficient supply of diesel oil.
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According to the data released by oilfield service company this week, the number of active oil rigs in the United States was 671, down 3 on a month on month basis, down 214 on a year-on-year basis; meanwhile, the number of active oil rigs in Canada was 86, down 2 on a month on month basis and 38 on a year-on-year basis.
US strategic crude oil reserves last week fell 1.972 million barrels from a month earlier, the biggest decline in seven consecutive weeks, according to the US energy information administration. Market participants expect crude oil demand to remain at a high level as the year-end shopping season arrives.
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