© Reuters. Crude oil trading reminder: the rebound in consumer confidence boosts oil prices, the new round of Iranian nuclear conference is held, and all parties are cautious
During the Asian session on Monday (June 14), U.S. crude oil rose slightly, and oil prices hit a multi-year high of $71.24/barrel last Friday, and rose for the third consecutive week, as the new crown vaccination rate increased, prompting the authorities to gradually lift the pandemic restrictions , The outlook for global demand has improved.
Bullish factors affecting oil prices
[U.S. consumer confidence rebounded in early June]
A survey released last Friday showed that US consumer confidence rebounded in early June, as inflation concerns subsided and households became more optimistic about future economic growth and employment.
The University of Michigan announced that the initial value of the consumer confidence index rose to 86.4 in the first half of this month, and the final value in May was 82.9. Economists predict that the index will rise to 84.
Survey Director Richard Curtin said, “The number of consumers expecting strong growth in the U.S. economy and a net drop in unemployment is a record.” The improvement in confidence is mainly driven by middle- and high-income households, reflecting the unevenness of the economic recovery. .
The consumer status index rose slightly to 90.6 from 89.4 in May. The consumer expectations index rose from 78.8 to 83.8, the highest level since February 2020.
Thomas Simons, a money market analyst at Jefferies, said in a report, “Overall, considering the progress made in restart and normalization, as well as the status of vaccinations, there is more good news in this report than Bad news.” The one-year inflation expectations in the survey fell from 4.6% to 4.0%, and the 5–10 year inflation expectations fell to 2.8% from 3.0% in May.
Although consumers are more optimistic about the job market and the economy than they were in May, and their concerns about inflation have eased, people are still concerned about the high prices of commodities such as cars and housing.
Phil Flynn, senior analyst at Price Futures Group, said, “Demand is picking up faster than supply, and we need more supply to meet demand.”
US investment bank Goldman Sachs Group said that the price of Brent crude oil is expected to rise to US$80 per barrel this summer, as vaccination has boosted global economic activity.
[A new round of Iranian nuclear conference is held, and all participants are cautious]
The sixth round of meetings of the parties involved in the comprehensive agreement on the Iranian nuclear issue will be held in Vienna, the capital of Austria, starting on the 12th. Many parties are cautious about the possibility of breakthroughs in this round of meetings.
Enrique Mora, the chief negotiator of the European Union and Deputy Secretary-General of the Foreign Action Agency, said on the 12th that he expects an agreement to be reached in this round of meetings. An EU spokesperson told the media that the meeting “is making progress” and the parties are “tensed” to negotiate, but there are still “a series of issues” that need to be resolved, including how to implement follow-up measures.
Iran’s chief negotiator and deputy foreign minister Abbas Araghi told the Iranian media that he believes that “we will not get the final result in Vienna this week”.
Some analysts said that since Iran will hold a presidential election on the 18th, it is unlikely that the parties will reach any agreement before the end of the election.
The Iraqi oil chief, although ExxonMobil withdrew from the West Qurna 1 oil field project, he believes that the company will maintain its investment in other projects. If OPEC abides by the current production agreement, it is predicted that the oil price in the second quarter will be US$68-75 per barrel. Interval.
Negative factors affecting oil prices
The International Energy Agency (IEA) stated in its monthly report that OPEC+, formed by the Organization of Petroleum Exporting Countries (OPEC) and its allies, needs to increase production to meet demand. It is expected that demand will return to pre-pandemic levels by the end of 2022.
Energy services company Baker Hughes stated in its weekly report that the number of active drilling rigs in the United States increased by six this week, reaching 365, reaching the highest level since April 2020 and the largest increase in a month.
[British Prime Minister Johnson hinted that the lifting of epidemic prevention restrictions may be postponed]
British Prime Minister Johnson stated that he is now not optimistic about lifting the epidemic prevention restrictions as scheduled on June 21. This statement implies that as the number of new crown cases increases, the UK’s epidemic prevention regulations may last longer. Johnson said the government must be “cautious” when it takes the last step to unblock it to protect the success of the vaccine program. Officials will study the spread of the delta variant virus in the UK, and then announce the next step on Monday.If it is postponed, it will hit the entertainment and hospitality industries including bars and theaters.
[India mucormycosis cases increased by 150% within three weeks, with more than 2,100 deaths]
According to CCTV News, India’s New Delhi TV station reported on June 11 that the number of mucormycosis cases across India increased by 150% within three weeks to 31,216, including 2,109 deaths.This puts additional pressure on India’s medical system, which is currently suffering from the impact of the new crown epidemic.
[Over 300 vaccination centers in Madhya Pradesh, India are temporarily closed due to vaccine shortage]
Due to the shortage of vaccines, Indore, Madhya Pradesh, India opened only 9 of the 350 vaccination centers on the 11th. According to India’s Asia News Agency, many vaccination centers in Indore have been closed since the 10th due to a shortage of vaccines. On the 11th, the local health department said that only 11,000 doses of vaccine were obtained. Only 9 vaccination centers were opened that day, and more than 300 other vaccination centers were not open.
According to a South African media report on June 13, South African health experts stated that there may be as many as 30 new coronavirus variants in the country. Experts worry that late-stage HIV patients may become “global new coronavirus mutation factories.”
Brazilian media reported on June 12 local time that 12 people in the Venezuelan delegation of the America’s Cup tested positive for the new crown virus, including 5 players and 7 staff. The local health department said that the 12 people were all asymptomatic infected and have been isolated in a hotel in Brasilia.
On the whole, the rebound in consumer confidence and the optimism of demand expectations are good for oil prices. All parties involved are cautious about the possible outcome of the new round of the Iranian nuclear conference, highlighting the lack of optimism in the negotiation process, which is also conducive to oil prices to a certain extent. Short-term oil prices The focus is still on the Iranian nuclear negotiations.
At 8:13 Beijing time, US crude oil is now quoted at 70.90 US dollars per barrel.