High International Oil Prices OPEC + Good Prospects for Demand Recovery

As OPEC + announced a day in advance to maintain the policy of gradual increase in supply  geopolitical tensions in the Middle East, international crude oil futures prices rose overnight in the market, April 27 intraday narrow consolidation, late gains significantly expanded,  international oil prices rose significantly at the close.

As of the close of the day, the price of light crude oil futures delivered on the New York Mercantile Exchange in June 2021 rose $1.03 to $62.94 per barrel,  1.66 percent. London Brent crude for June 2021 rose $0.77 to $66.42 a barrel,  1.17 percent.

OPEC issued a statement on April 27 that the OPEC  non-OPEC ministerial meeting held on April 27 in the form of an online videoconference, the meeting decided to continue the early April plan  May to July to gradually reduce the scale of production.

OPEC stated that the implementation rate of production reduction in the participants in the March cut-off agreement was 115%,  the excess output was 1.23 million barrels per day in the month. Nevertheless, a number of reducing production countries have yet to achieve a 100 per cent reduction implementation rate. Cutters said they would make up for the previously incomplete cut by the end of September.

According to OPEC disclosure in early April, the OPEC  non-Opec oil-producing countries joint ministerial meeting will be held on April 28. The latest disclosures say the next ministerial meeting will be held on June 1.

Traders don't want to miss out on the likely benefits of opec + meetings, so oil prices reflect limited optimism, says mr. BjornarTonhaugen, senior vice president  head of oil markets at reista energy.

Oil prices attempted to improve on april 27th as news of the saudi port explosion  u. s.vaccination could offset the gains  india's new crown, senior market analyst phil frein said on april 27th. Flynn says oil prices are still looking for directions in the short term.

Analysts believe U.S. commercial crude oil stocks fell by 200,000 barrels a month last week, distilled oil stocks fell by 1.2 million barrels a month, while gasoline stocks remained the same, with an average refinery operating rate of 85.3 percent last week, up 0.3 percent  a month earlier, according to survey data released later on April 26.

Oil demand positive  negative offset

Earlier, concerns about a serious rebound in India could prompt OPEC + to stop implementing the earlier decision to reduce production gradually. However, the meeting between OPEC  partner countries showed that the production reduction countries were more consistent in their judgment on the current situation of supply  demand in the international oil market, so they quickly made a decision to continue to implement the previous policy  held a meeting one day in advance to announce the decision, which released a more positive signal to the market.

In terms of market impact, India, as the world's third largest oil consumer  one of the main importing countries, its outbreak out of control does make the oil market significantly under pressure. However, the rapid vaccination of the United States, the world's largest economy  the largest oil consumer,  the faster vaccination of the United Kingdom have also improved in this regard, thus offsetting each other  allowing oil producers to maintain their previous policies. It is worth noting that the deterioration of the Indian epidemic has  yet spread to other major economies is one of the important reasons for the relative stability of the market.

Russian deputy prime minister alexander novak said on the 27th that the oil market is positive, oil demand is recovering, although the rapid spread of the new crown virus in india  latin america is worrying.

Wood McKenzie's vice president of macro-oil market research, Ann-Louis Hittel (Ann-LouiseHittle), said OPEC was + insisting on its decision to gradually  cautiously increase supply in the coming months. Cutters are trying to balance the risk that demand, including India, could fall as a result of a rebound in the epidemic with signs of recovery elsewhere.

Marshall Steves (MarshallSteeves), energy market analyst at Essien Wahmai (IHSMarkit), said that while the recovery in the United States  the United Kingdom is considered to compensate for the lack of oil demand in India, the increase in the number of new crown infections in India remains worrying  is likely to hinder global demand growth.

Austria JBC energy said a few days ago, Because of the rebound, India's latest travel index fell 20 percent, In the first half of April, diesel  gasoline consumption in India fell 3%  5%, respectively,  a month earlier. Demand for gasoline  diesel in India is expected to fall 29 per cent  20 per cent, respectively,  March levels in May, The decline was 230000 barrels per day  360000 barrels per day.

Hittel said OPEC + need to balance the risk that the recovery in oil demand will be weaker than expected over the next three months. In addition to demand, another major risk for oil prices is the success of negotiations between Iran  the United States on a return to the 2015 nuclear agreement. If an agreement is reached, the United States is likely to lift sanctions against Iran  allow Iran to supply more crude oil to global markets.

Strong demand recovery prospects

Despite repeated outbreaks in several countries, the prospects for a recovery in global economic  oil demand remain largely positive, with demand expected to rise rapidly during the summer peak season.

OPEC said the ministerial meeting stressed the continued recovery of the global economy supported by loose monetary  fiscal policies, which is expected to accelerate in the second half of this year. Still, a rebound in the number of new infections in some countries could hamper recovery in economic  oil demand.

Global daily oil demand is expected to rise to more than 99 million barrels a day by the second half of this year  the current 94 million barrels a day  eventually close to 100 million barrels a day in the second half of the year, thanks to rapid vaccination  reduced travel restrictions, according to GiovanniStaunovo, an oil analyst at UBS.

With moderate growth in oil production outside the OPEC +  a cautious OPEC + position, the oil market supply  demand gap is expected to be 1.5 million barrels a day this year, Brent crude oil futures will rise to $75 a barrel in the second half of the year,  New York crude oil futures will rise to $72 a barrel in the second half of the year, Stonovo said. The decline in global oil inventories supports this year's view that oil markets are in severe supply shortages.

Stonovo said oil prices could rise even higher if unstable political events in libya, venezuela, nigeria  the middle east continue to cause a sharp drop in supply.

Non-OECD countries' demand for oil in the first quarter was about 10% higher than in the first quarter of 2019, mainly because of China's contribution, Stannovo said. It is estimated that China's oil demand rose 11 percent in the first quarter,  about 1.4 million barrels a day.

Nevertheless, Jim Ritterbush (JimRitterbusch), president of the Ritterbusch&Associates, said the possibility that OPEC + on the supply side could increase production  that demand on the demand side could weaken Asian oil demand, suggesting that the decline in global oil surpluses could end.  it is the decline in excess oil that has supported oil prices in the past year.

For more information on energy trading platforms, consulting financial services platform, warehousing logistics platform, hazardous chemicals operating license processing platform  bulk energy trading platform manufacturer Eurasia Mainland International Energy Trading Market Management (Jiangsu) Co., Ltd.

Source: China Energy Network