Original title: Fed tightening monetary policy is expected to heat up, international oil prices fell significantly on the 19th
As the market expects the Fed to reduce asset purchases this year and the U.S. dollar index rose significantly, international crude oil futures prices fell significantly on the 19th.
As of the close of the day, the price of light crude oil futures for delivery in September 2021 on the New York Mercantile Exchange fell 1.77 US dollars to close at 63.69 US dollars per barrel, a decrease of 2.70%. London Brent crude oil futures for delivery in October 2021 fell 1.78 US dollars to close at 66.45 US dollars per barrel, a decline of 2.61%.
American Price Futures Group senior market analyst Phil Flynn said on the 19th that oil prices fell in a safe-haven mode due to the Fed’s hint that it might begin to reduce the scale of asset purchases this year and the continued fear of the epidemic. The minutes of the Fed’s meeting on interest rates put pressure on the entire commodity sector.
Commerzbank analysts said that the global spread of Delta virus variants has brought concerns about oil demand and continues to prevent any rise in oil prices. Although the summer driving season is still three weeks away, it is already clear that oil demand this summer will not be as high as previously expected.
Edward Moya, a senior market analyst at OANDA, an online foreign exchange trading platform, said that there are still too many doubts about the outlook for crude oil demand in the next few months, which will put pressure on oil prices. After the Federal Reserve announced the minutes of the latest interest rate meeting on the 18th, risk aversion became the market leader, and oil prices continued to fall.
On the same day, the demand for hedging continued to push the US dollar index higher. The index rose to above 93.50 that day, an increase of more than 0.4%, putting pressure on oil prices.
Moya said that although the decline in crude oil futures prices for six consecutive trading days seems a bit too much, it may require signals from OPEC and production reduction partners to stop the decline, and OPEC and production reduction partners may need to suspend plans to increase production.
Moya believes that the oil market is still in a state where supply is less than demand. If the price of New York crude oil futures drops below $60 a barrel, it is likely to attract many long-term long positions. Although oil prices may be close to bottoming out, energy traders need some positive aspects of global economic growth.
Austrian JBC Energy said on the 18th that although the increase in Delta virus variants is delaying the full recovery of oil demand, it is still expected that the global average daily oil demand will rise to the level of 100 million barrels per day by the end of this year.
JBC Energy said that it is expected that the utilization rate of global refining capacity in 2022 will return to the level of 2019. But this may be the high point of the utilization rate for many years in the future, and the mid-to-long-term prospects of the refining industry are far less optimistic. It is estimated that by 2027, the global new refining capacity will increase by 3.5 million barrels per day compared with 2019, and the actual new refining capacity required during this period is less than one-third of this. (Xinhua Finance)
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