Oil Price BBI Info
1. Market review: WTI crude oil rose and fell on Thursday, and finally closed up 0.57% at US$83.49 per barrel; Brent crude oil finally closed up 0.51% at US$90.35 per barrel.
2. The U.S. EIA natural gas report shows that as of the week of September 16, the total U.S. natural gas inventory was 2,874 billion cubic feet, an increase of 103 billion cubic feet from the previous week and a decrease of 197 billion cubic feet from the same period last year, a year-on-year decrease of 6.4%. It was also 332 billion cubic feet below the five-year average, or 10.4%.
3. In terms of the energy crisis, U.S. President Biden said that the energy industry must pass the money saved on gasoline to consumers by lowering prices; the European Securities and Markets Authority proposed to suspend the trading of energy derivatives during the price surge.
4. According to sources, the EU may introduce new sanctions against Russia next Wednesday. European Commission Vice-President and Foreign Minister Borrell said that EU ministers agreed to impose more restrictions on Russia as soon as possible. Hungarian Prime Minister Viktor Orban said the EU must end sanctions against Russia by the end of this year.
5. The progress of the Iran nuclear negotiation:
Iranian President Rahey said ending the IAEA investigation was necessary for Iran to reach a sustainable nuclear deal with the West;
-U.S. targets Iran’s ‘morality police’ over alleged abuse of women
And seven senior military and security officials, including the head of the Iranian Army’s ground forces, imposed sanctions. U.S. state affairs
A senior hospital official said more measures would be taken against Iran.
6. According to the Nigerian oil minister, if oil prices continue to fall, OPEC may be “forced” to cut production further.
Oil Price Market Viewpoints
1. Downward economic pressure will keep oil prices under pressure
The impact of supply shortages is compounded by a deteriorating outlook for crude demand, and energy traders are struggling to cope with continued volatility in oil prices. Supply risks and a tense market environment will support oil prices above $80, but a rapid global economic downturn will keep oil prices under pressure. The energy crisis and aggressive central bank tightening stifled growth prospects, pushing euro zone consumer confidence to record lows and capping gains in oil prices.
2. Russia’s energy influence will be further weakened
Energy markets have been turbulent. The Fed further tightened hawkishly, the market boosted interest rate hike expectations for the meeting this year, the overall market sentiment remains negative, and the demand outlook is increasingly bleak. However, there are still significant supply concerns in the market. Russia’s announcement of “partial mobilization” has raised concerns about energy supplies, the possibility of the West becoming more aggressive in energy sanctions, and the possibility of Russia further weaponizing energy. The influence of Gazprom on Europe is gradually declining, and with the implementation of the EU ban, the influence of Russian oil on the EU will also be further weakened.
3. Natural gas prices may continue to fall
The EU gas market appears to be well-supplied after six months of opening up and cutting costs, with gas prices reflecting the improved supply outlook. Seasonal inventory builds have been stronger than ever, preparing the market for peak natural gas demand in the winter. As long as demand remains low, we see little chance of a decline in EU gas inventories over the next six months. With Russia running out of options to destabilize the European gas market, and despite a supply cut to Germany, gas inventories are still growing strongly, so lower gas prices may be the path of least resistance.
4. Energy prices to remain cyclically strong
The energy industry has reaped big profits this year, with crude and natural gas companies making big gains thanks to high commodity prices. Although commodity prices have retreated from the high levels of early 2022, they are likely to remain cyclically strong in 2023. Low capex, still uncertain supply, and high geopolitical risk premiums will continue to support oil prices at cyclical highs.