will oil gas go next?

One is the shift in U.S. energy policy - about to reduce output, according to investment.com on March 9; Second, the crude oil futures price of the New York Mercantile Exchange rose to a high level continued to break up; Third, the price of natural gas has been lower; Fourth, the decline in crude oil production in the United States OPEC has pushed oil prices up; Fifth, compared with previous years, natural gas inventories are falling.

The crude oil gas market is being readjusted after falling to a 25 year low in 2020. On April 20, 2020, the NYSE crude oil price fell to minus $40.32 a barrel, the lowest since WTI began trading in the early 1980s. As storage facilities are filled, this energy commodity is nowhere to be placed. Seaborn Brent benchmark futures fell to the lowest level in the century - at $16 a barrel.

In addition, at the end of june2020, the gas price reached $1.432 / million UK heat, the lowest since 1995.

Since then, prices have started to pick up. Optimism about the end novel coronavirus pneumonia, which has led to the evaporation of demand, has pushed up oil gas prices. Meanwhile, record central bank liquidity government stimulus have increased global money supply seeded inflation in the global financial system.

In early 2021, crude oil gas prices continue to rise, this trend seems to continue. The US oil fund the US natural gas fund are ETF products, with the portfolio of oil gas futures contracts rising falling.

Energy policy change in the United States: oil production is about to decrease

The United States has cancelled the keystone XL pipeline project, which will transport crude oil Alberta province of Canada to the United States.

Strengthening regulation shifting to alternative energy will reduce U.S. oil output. Previously, the United States advocated the independence of oil gas production the Middle East other global producers, while the current policy path would change the energy pattern of the United States.

Crude oil futures on the New York Mercantile Exchange rose to a new high are expected to continue to rise. The weekly chart of crude oil futures on the New York Mercantile Exchange showed that the energy commodity rose to a high of $66.42 a barrel last week. Crude oil prices broke through the high of $65.65 a barrel in 2020 on March 5. The next target is around $66.60 a barrel, the highest level in april2019.

Under the open position, the total number of long short positions in the oil futures market of the New York Mercantile Exchange is close to 2.5 million barrels, which is higher than the level of 2 million barrels in early November. It should be known that energy commodities reached a low of $33.64 a barrel at that time, recovered the rising track April 2020, a record low. The price kinetic energy relative strength index are still in overbought state. The weekly wave rate is 2.9%, reflecting the slow stable rise of oil prices.

Lower natural gas prices

In june2020, the price of natural gas futures fell to the lowest level in 25 years, with the contract price of $1.432 per million British heat in recent months.

Since then, the price of natural gas has been falling continuously. Although the open contract index has fallen more than 1.3 million to slightly below 1.2 million, this may be due to seasonal factors. In early March, the gas market will usher in a demand off-season, as gas inventories will start to climb at the end of this month.

As of September, 2009, the weekly price kinetic energy relative strength index were neutral. In 2021, the weekly historical volatility has been stable at more than 50 percent, but it has declined more than 80 percent since the start of the peak demand season in early November last year.

Lower US OPEC crude oil production helped oil prices rise

The US crude oil production reached a record 13.1 million barrels / day in march2020. According to the EIA, the daily production was 10million barrels per day as of February 26, down 23.7 percent year on year.

A shift in U.S. energy policy could lead to record production march2020 to remain unchanged in the foreseeable future, as the regulatory environment now supports lower levels of production in the coming months years.

While alternative energy may eventually lead to the United States' energy independence, the short-term impact is to return some pricing rights to OPEC Russia. Last week, despite rising oil prices, OPEC + decided to keep its current production policy unchanged Saudi Arabia will continue to voluntarily cut production.

As the U.S. economy gets out of the epidemic, this may squeeze US consumption. Saudi oil minister told CNBC in an interview that OPEC + has now increased pricing power in the oil market. OPEC members would rather sell less at higher prices than more at lower prices. Under the influence of OPEC's new output, the crude oil futures price is higher than the peak in 2020.

Natural gas inventories are falling compared to previous years

On March 4, EIA released a more recent state of natural gas inventories across the United States. Although newer supply data show that as of February 26, U.S. inventories had fallen by 1.845 trillion cubic feet, down consensus expectations, down 13.1 per cent year on year. In addition, inventory at the end of February was 8.8 per cent lower than the 5-year average.

The stock market will continue to fall in the coming weeks. Estimize website shows that the current general expectation is that inventory will be reduced by 88billion cubic feet for the week ended March 5.

The bull market is rarely straight. In the commodity sector, crude oil natural gas futures markets usually need a supply shock to see a parabola. As more than half of the world's crude oil reserves are in the Middle East, a force majeure region, there are always accidents that can lead to a sharp rise in oil prices.

In short, the change in U.S. energy policy is good for oil gas prices. We have seen this impact permeate the price of energy commodities. Bargain hunting for oil gas may be a better practice in the coming weeks months.

Source: international oil network