the commodity market fluctuated greatly during the holidays, and geopolitical conflicts pushed oil prices soaring to nearly us$78 per barrel.
2024-10-05
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geopolitical risks have intensified and the crude oil market has become more volatile.
during the holidays, international oil prices continued to rise sharply, with wti crude oil futures rising for three consecutive times to us$74.09/barrel, a high in more than four weeks; brent crude oil futures rose for five consecutive years, reaching a maximum of us$77.99/barrel, with weekly gains averaging more than 7%.
this trend is in sharp contrast to the continued low oil prices in mid-september. in september, the international energy agency (iea), the u.s. energy information administration (eia) and the organization of the petroleum exporting countries (opec) all lowered their global crude oil demand expectations in 2024. this adjustment is mainly based on the pressure on consumption caused by the economic slowdown and the accelerated transformation of oil into new energy sources.
liu shunchang, an energy and chemical analyst at nanhua futures, believes that the intensifying geopolitical conflicts in the middle east have once again made the market worried that crude oil production and exports may be materially affected. in the short term, geopolitical tensions in the middle east have driven oil prices to strengthen significantly. in the long term, we need to pay attention to opec+ supply and u.s. macroeconomic data.
on the supply side, opec has maintained its pace of increasing production, and opec supply tends to increase in the distant months. on the demand side, the fourth quarter is the refinery maintenance season. from september to october, refinery maintenance losses increase and refinery profits decline. it is expected that the intensity of autumn inspections may be higher than in previous years. the weakening manufacturing pmi in europe and the united states also strengthened the market's confirmation of insufficient demand.
liu shunchang analyzed that opec+ kept its oil production policy unchanged at the october 2 meeting, that is, starting in december and increasing production by about 200,000 barrels per day month by month in the following year; on the other hand, the u.s. non-agricultural new data on job growth and unemployment showed that significantly lower-than-expected employment data in july and august heightened market concerns about u.s. economic growth, driving oil prices back down. pay attention to the short-term disruption that u.s. non-farm payroll data may have on oil prices.
on the macro front, wuchuan zhongda futures analysis pointed out that the official start of the fed's interest rate cut cycle means that the economy is weakening. in the early stages of interest rate cuts, crude oil volatility amplified, and then entered a more coherent trend. in the fourth quarter, the market is paying more attention to the pace and extent of u.s. interest rate cuts. key data such as non-farm employment before the interest rate meeting will affect the market's expectations of whether the economy will recession.
there is a high probability that crude oil demand will decline in the fourth quarter. in the analysis of wuzhou zhongda futures, the marginal variable that needs attention is the domestic economic stimulus policy. since september 24, the state has issued a series of monetary and fiscal policies to stimulate economic growth. these policies involve various aspects such as improving liquidity, maintaining stability in the real estate market and supporting the securities market; increasing countercyclical adjustments in fiscal and monetary policies to ensure necessary fiscal expenditures; and improving the overall consumption capacity of society and focusing on upgrading the economic structure and improving people's livelihood. and other measures to boost consumer confidence. pay attention to the stimulating effect of china's economic policies on end demand.
looking forward to the post-holiday period, liu shunchang believes that the crude oil market is expected to remain strong internally and weak externally. domestic policies will continue to boost demand expectations, and domestic oil prices are expected to be strong. the impact of geopolitical tensions in the middle east and u.s. non-agricultural data will increase the volatility of the crude oil market.
(this article comes from china business news)
