In the New York session on Thursday (October 13), at 23:00 Beijing time, data released by the U.S. EIA showed that in the week ended October 7, the U.S. commercial crude oil inventories excluding strategic reserves increased by more than expected, and refined oil inventories increased significantly. Leading value, while gasoline inventories fell leading value. After the EIA data was released, U.S. crude oil prices fell slightly by $0.2 in the short-term.
EIA crude oil inventories rise more than expected
Specific data show that the U.S. EIA crude oil inventory changes in the week ended October 7 actually announced an increase of 9.88 million barrels, an expected increase of 175 barrels, and a decrease of 1.356 million barrels from the previous value.
In addition, the U.S. EIA gasoline inventories actually announced an increase of 2.023 million barrels in the week ended October 7, and the previous value decreased by 2.422 million barrels; the U.S. EIA refined oil inventories actually announced a decrease of 4.853 million barrels in the week ended October 7, and the previous value decreased by 2.892 million barrels. million barrels.
The EIA report showed that U.S. crude oil exports fell by 1.679 million barrels per day to 2.872 million barrels per day in the week to October 07. The four-week average supply of U.S. crude oil products was 19.952 million barrels per day, a decrease of 3.77% from the same period last year. U.S. domestic crude oil production fell by 100,000 barrels to 11.900 million barrels per day in the week of October 07. In the week of October 07, the US Strategic Petroleum Reserve (SPR) inventory decreased by 7.690 million barrels to 408.7 million barrels, a decrease of 1.85%.
The EIA report showed that the United States imported 6.063 million barrels of commercial crude oil excluding strategic reserves in the week of October 07, an increase of 116,000 barrels per day from the previous week. Commercial crude oil inventories excluding strategic reserves increased by 9.879 million barrels to 439 million barrels, an increase of 2.3%.
U.S. domestic crude oil production in the week to October 7 was the lowest since the week to July 15, 2022, the EIA report showed. U.S. EIA gasoline inventories rose the most since the week to July 15, 2022 for the week to October 7. U.S. crude oil exports in the week to Oct. 7 were the lowest since the week to Aug. 5, 2022. U.S. EIA crude oil inventories rose the most since the week to March 5, 2021 for the week to October 7.
The EIA report showed that the U.S. EIA Strategic Petroleum Reserve inventory in the week to October 7 was the lowest since the week of June 15, 1984. U.S. EIA refined oil inventories fell by the most in the week to October 7 since the week to March 4, 2022. U.S. commercial crude oil inventories excluding strategic reserves for the week to Oct. 7 were the highest since the week to July 30, 2021.
The agency commented on EIA crude oil inventories: The spread between diesel and gasoline is expected to widen this winter due to seasonality and refinery increases in diesel output, which may lead to a gasoline glut in the Gulf Coast region. It’s safe to say that the nearly 10 million-barrel rise in U.S. crude inventories was largely due to a sharp drop in exports. The agency commented on EIA crude oil inventories that for several months, the capacity utilization rate of U.S. refineries has been above 90%, and now it is only 89.9%. It was the lowest since April as fall maintenance work is in full swing.
U.S. crude oil prices 5-minute chart showing
Fears of global economic downturn weigh on crude oil demand outlook, unfavorable for oil prices
Also putting downward pressure on crude oil prices are the latest economic forecasts from the International Monetary Fund (IMF). The IMF cut its 2023 global growth forecast to 2.7% from 2.9% in July, citing high energy and food prices and pressure to raise interest rates as key catalysts for the cut. Notably, the Washington-based institute maintained its growth forecast for 2022 at 3.2%, compared to 6.0% global growth in 2021.
OPEC and EIA cut their forecasts for global crude demand growth amid recession fears. OPEC and the U.S. Energy Information Administration (EIA) cut their forecasts for global crude demand growth amid recession fears, adding additional momentum to the slide. The world economy has entered a period of heightened uncertainty, OPEC said in its latest monthly energy outlook report released on Wednesday. Tightening policies and high inflation levels by central banks in developed countries could hurt demand for crude. The forecast for the growth rate of global crude oil demand in 2022 is lowered by 460,000 barrels per day to 2.64 million barrels per day, compared with the previous forecast of 3.1 million barrels per day; the global crude oil demand in 2022 is expected to be 99.67 million barrels per day.
OPEC lowered its forecast for global crude oil demand growth in 2023 by 360,000 barrels per day to 2.34 million barrels per day, from 2.7 million barrels per day previously; global crude oil demand in 2023 is expected to be 102.02 million barrels per day; OPEC oil supply growth forecast is lowered by 180,000 barrels per day to 1.93 million barrels per day; non-OPEC crude oil supply in 2022 is expected to be 65.6 million barrels per day, compared with 65.78 million barrels per day previously; non-OPEC crude oil supply in 2023 is expected to be 67.13 million barrels per day, compared with the previous forecast of 67.51 million barrels per day.
Meanwhile, the U.S. Energy Information Administration (EIA) echoed OPEC’s pessimistic tone, downgrading its production and demand forecasts. In the short-term energy outlook report released by EIA on Wednesday, it is expected that the growth rate of global crude oil demand in 2022 is expected to be 2.12 million barrels per day, compared with 2.1 million barrels per day before; 1.97 million bpd; U.S. crude oil production is expected to increase by 500,000 bpd in 2022, from 540,000 bpd; The growth rate of U.S. crude oil demand is expected to be 460,000 barrels per day in 2022, compared with 510,000 barrels per day previously; the growth rate of U.S. crude oil demand in 2023 is expected to be 190,000 barrels per day, compared with 350,000 barrels per day previously.
U.S. PPI data and the latest Fed meeting minutes boost dollar bulls’ confidence, not conducive to oil prices
Data released by the U.S. Bureau of Labor Statistics on Wednesday showed that the U.S. producer price index (PPI) in September fell to 8.5% year-on-year from 8.7% in August. 0.2% expected. The year-on-year increase in core PPI edged down to 7.2% from 7.3% in the previous month, compared with analysts’ forecast of 7.3%, and rose 0.3% month-on-month, unchanged from August.
The September Producer Price Index (PPI) provided the latest evidence that inflationary pressures are fading, but there is still a long way to go before inflation returns to a more satisfactory level, and the road will have some tortuous. If U.S. CPI data on Friday is expected to show that inflation remains fast and broad, that could prompt Fed policymakers to raise the benchmark interest rate by another 75 basis points next month.
Brown Brothers Harriman economists report that continued risk aversion and an eventual repricing of Fed tightening risks could keep the dollar rallying after the recent correction. Yellen made it clear that U.S. policymakers are not worried about a strong dollar right now. Specifically, she said, “it is in the interest of the United States to let the market determine the value of the dollar. Exchange rate fluctuations are an inevitable consequence of different policy stances.” Since U.S. foreign exchange policy is controlled by the Treasury, Yellen’s remarks indicate that there is a The dollar’s surge isn’t a concern.
Minneapolis Fed President Kashkari said on Wednesday they would have room to assess the economy by adjusting interest rates at a “aggressive but not overwhelming” pace. A downturn in the housing market is possible, but not necessarily a severe crash. There is huge uncertainty about the fundamentals of the U.S. economy. Will judge whether we raise rates by 50 basis points or 75 basis points. We must deliver on our promises on interest rates. This is the only way to validate mid- to long-term inflation expectations.
Fed officials agreed they need to raise interest rates to a more restrictive level and then hold them there for a while to achieve their goal of lowering inflation, minutes from the Fed’s September policy meeting released on Wednesday showed. Many Fed officials “stressed that the costs of doing too little to reduce inflation could outweigh the costs of doing too much.” Many officials said they raised their assessment of the path of rate hikes that may be needed to achieve the policy-setting committee’s goals. It was important to “calibrate” the pace of further policy tightening, with the aim of mitigating the risk of a material adverse impact on the economic outlook, several members said. Several policymakers stressed the need to maintain a restrictive stance as long as needed.
Fed Governor Bowman said in his speech on the forward guidance of policy tools that if there is no sign of inflation, it is still possible to raise interest rates “substantially”; if inflation starts to decline, it will be appropriate to slow the pace of interest rate hikes; fully Support for the Fed’s previous 75bps rate hike; Fed funds rate needs to rise to a restrictive level and stay there “for a while”; it’s unclear how long before inflation will fall “sustainably”; significant uncertainty about inflation outlook This makes it challenging to provide accurate guidance on the path of interest rates.
Risk of insufficient energy supply provides some support for oil prices
OPEC+ cut its output target last week despite opposition from the Biden administration as the group seeks to prop up high oil prices. U.S. President Joe Biden expressed his disappointment with the OPEC+ decision, sparking tensions between the U.S. and Saudi Arabia and weighing on oil prices. Biden promised on Tuesday that the U.S. relationship with Saudi Arabia “will have consequences” after OPEC+ announced last week that it would cut oil output despite U.S. opposition. Biden’s announcement came a day after U.S. Sen. Menendez, the chairman of the U.S. Senate Foreign Relations Committee, said the U.S. must immediately freeze all cooperation with Saudi Arabia, including arms sales. OPEC+ last week decided to cut output by 2 million barrels a day, pushing oil prices to a fresh six-week high at one point.
Analysts at TD Securities believe: “The actual production cut by OPEC+ of 1.1 million barrels per day will tighten the physical balance, providing a positive catalyst for spot prices and time supply, thereby incentivizing more participation. With the US Strategic Crude Reserve (SPR) The release of oil has come to a halt, while Russian production has begun to decrease at a faster rate, which is setting the stage for a sharp rise in oil prices. While the recovery in Kazakh oil supplies has provided some compensation, strikes in the Iranian oil industry have reportedly spread to A major refinery in the Southwest, further adding to supply risks. The right tail of oil prices remains fat.”
According to news from Poland, a leak in the Druzhbka pipeline that supplies Russian oil to Europe has halted the delivery of about 200,000 barrels of crude oil per day, exacerbating the recent supply crunch and supporting oil prices. Poland said it was most likely an accident, not sabotage. That has focused traders’ attention on the demand side of the equation – a hard landing could still derail the recovery in energy prices, but the usual recession expected by most economists is likely to slow oil demand growth , but does not drop. This could exacerbate the tightening in energy markets, while liquidity in China continues to firm for now, as seen in our tracking of road traffic conditions in the 15 cities with the highest car registrations.
An informal meeting of EU energy ministers in the Czech Republic on Wednesday broadly agreed to jointly purchase natural gas and promote energy savings by the summer of 2023. However, in terms of natural gas price caps, whether it is a price cap on imported natural gas from Russia or a price cap on natural gas used for power generation, there are still serious differences among countries, and no consensus has been reached.