INE crude oil falls, demand faces new variables, investors wait for OPEC+ meeting results
Shanghai crude oil prices fell on Thursday (July 1). The main contract 2108 ended at 459.5 yuan/barrel, down 1.1 yuan/barrel, or 0.24%. Investors waited for major oil-producing countries to maintain or relax their supply in the second half of the year. make a decision. Analysts predict that the global shortfall in demand will expand in the second half of the year, as OPEC+ maintains production cuts despite rising demand.
OPEC+ will meet on Thursday to decide whether to keep production unchanged or increase production, which may increase by more than 1 million barrels/day, or moderately increase by 500,000 barrels/day. An ANZ Bank analyst said: “The discussions on the sidelines show that Russia is proposing to increase supply, while Saudi Arabia hopes to take a more cautious approach.” He added that the outbreak of the Delta virus variant is causing people to be frustrated with demand recovery. Worries.
US Energy Information Administration (EIA) data show that US crude oil inventories fell for the sixth consecutive week last week, reflecting rising demand.
List of futures contracts and transactions
Trading summary and trading strategy
Shanghai crude oil prices fell, and the main contract 2108 ended at 459.5 yuan/barrel, down 1.1 yuan/barrel, or 0.24%.
(INE crude oil daily chart)
Trading logic: US crude oil trading tended to be cautious on Wednesday, mainly because of the important OPEC+ monthly meeting on Thursday. Intraday material volatility is relatively large. The current market mainstream expectation is to increase production by about 500,000 barrels per day. However, due to the different opinions of Saudi Arabia and Russia, there are still some variables in the results of the meeting. However, even if the output is increased by 1 million barrels per day, it will be difficult to change the current situation of crude oil market demand exceeding supply. . In addition, the technical side is obviously beneficial to the bulls. As long as oil prices hold the 10-day moving average in the short-term, the bullish trend will remain unchanged. It is recommended that conservatives wait and see for the time being, and radicals continue to buy more on dips.
Support levels: INE crude oil at 454.1, U.S. oil at 73.18
Resistance levels: INE crude oil 464.6, US oil 74.45
China and overseas news
Canada announces a ban on the sale of new fuel vehicles from 2035 to achieve net zero emissions by 2050
According to sources, Canadian Prime Minister Justin Trudeau said at a government press conference this Tuesday (June 29): “Canada will ban the sale of new fuel vehicles and light trucks from 2035, with a view to 2050. Achieve net zero emissions across the country in the year”
Scotland: Nearly 2,000 confirmed cases of new crown may be related to the European Championship
A report released by the Scottish Department of Health on the 30th showed that the nearly 2,000 newly confirmed cases of new crowns in Scotland may be related to the ongoing European Football Championship. The report said that of the 1991 cases, two-thirds of the people had traveled to London to watch the European Championship group match between England and Scotland on June 18. Of course, only 397 of them are actually sitting in the stadium at Wembley to watch. (Xinhua News Agency)
International Olympic Committee President Bach will arrive in Tokyo on July 8
There is less than a month before the opening of the Tokyo Olympics. On June 30, IOC President Bach’s visit to Japan is finally finalized. He will arrive in Tokyo next Thursday (July 8) to oversee the final 15th of the Olympic Games. Days of preparations. The IOC statement stated that Bach will complete the new crown pneumonia vaccination before departure, and will strictly abide by all the provisions of the Tokyo Olympics epidemic prevention manual during his stay in Japan, including three days of isolation in the hotel after arriving in Japan. (CCTV News)
There are 2148 new confirmed cases of new coronary pneumonia in Chile, and a total of 1,555,902 confirmed cases
There were 2,148 new confirmed cases of new coronary pneumonia in Chile, with a total of 1,559,902 confirmed cases; 56 new deaths and a total of 32,545 deaths. According to local media reports, the current R value of the new crown virus infection rate in Chile has been declining since June and has now dropped to 0.8, which is the lowest value of R value in Chile since the outbreak of the new crown virus. Experts said that the recent strict anti-epidemic policy and large-scale vaccination are the main reasons for the drop in R value.If the R value continues to decline in the future, the country’s epidemic situation will be greatly eased
Before the OPEC+ meeting comes, oil prices are at a high level and the bulls are not afraid of increasing production expectations under the pull of multiple bullishes
① International crude oil prices remained high before the OPEC+ meeting on Thursday, and they consolidated their momentum, as multiple bullish news is helping the retreat market to withstand the downside risks brought about by OPEC+ production increase expectations; first, the progress of the negotiations between the United States, Europe and Iran is still not going well. , Which means that the country’s prospects for restoring export production capacity are still far away; secondly, US shale oil producers have previously stated that they cannot restore production capacity on a large scale in the short term, while the EIA data released overnight showed that US crude oil inventories have further declined. This all means that even if OPEC+ intends to accelerate growth, it is difficult for oil prices to record a dramatic fall in the short term;
② While OPEC+ oil-producing countries have taken into account the high expenditure burden they face in the process of responding to the epidemic, they have also made their own efforts to increase production policies to avoid unpredictable impact on the market. In this situation, OPEC+’s strategy of maintaining a steady increase in daily output of 500,000 barrels per month is still a high probability, especially in the context of repeated global epidemics.And this will promote oil prices to maintain an upward trend in the market outlook under the premise that the demand is still rising steadily and the general environment remains unchanged for the time being.
Institutional perspective
Huatai Futures: Saudi Arabia and Russia are divided on increasing production
The JMMC meeting originally scheduled for Wednesday was postponed by one day. More market news indicated that Saudi Arabia and Russia have increased their divergence regarding the August production increase plan. Saudi Arabia tends to cautiously increase production slightly, while Russia hopes to increase production by a larger margin. Russia’s considerations are mainly Based on the impact of oil prices on domestic inflation, more communication and negotiations between Saudi Arabia and Russia are needed. We expect that the final compromise after the two parties will result in a small increase in production. We expect OPEC’s production increase in August will not exceed 1 million barrels per day. The market’s mainstream expectation is to increase production by about 500,000 barrels/day, but even if it increases production by 1 million barrels/day, it is difficult to change the current situation in which supply in the crude oil market exceeds demand. There are still three reasons for OPEC’s difficulty in increasing production: 1. Iranian oil is heavy. Uncertainty of returning to the market; 2. Current global stocks have not yet fallen to the pre-epidemic level; 3. Variant strains bring uncertainty to demand recovery.
Guosen Futures: U.S. crude oil inventories continue to decline, oil prices remain high and fluctuate
U.S. crude oil inventories have fallen for the sixth consecutive week. OPEC expects that there will be a shortage of supply this year, and international oil prices will continue to rise. However, attention is paid to epidemic prevention and control. U.S. gasoline demand has fallen and international oil price increases are limited. US Energy Information Administration data show that as of the week of June 25, US crude oil inventories were 452,342 million barrels, down 6.72 million barrels from the previous week; US gasoline inventories totaled 241,572 million barrels, an increase of 1.52 million barrels from the previous week. Technically, crude oil prices may remain high and fluctuate in the short term. Operational recommendations: wait and see for now.
Everbright Futures: The market will fluctuate sharply, pay attention to the risk of holding positions
Investors are still paying attention to the upcoming OPEC meeting, optimistically expecting that the oil-producing Congress will discuss extending its production reduction agreement beyond April 2022. EIA data shows that last week, US crude oil inventories fell for the sixth consecutive week, as the increase in demand caused refiners to increase production. Data show that the US crude oil inventories fell by 6.7 million barrels for the week ending June 25 to 452.3 million barrels. Analysts had expected a decline of 4.7 million barrels. The decline in inventories was due to the increase in refining activities. As of the week of June 25, the crude oil processing capacity of US refineries increased by 187,000 barrels per day, and the capacity utilization rate rose to 92.9%. From the overall data point of view, demand is still relatively strong. Oil prices as a whole still fluctuate strongly. The results of the OPEC+ meeting will be announced today. It is expected that the market will fluctuate sharply. Pay attention to the risk of holding positions.
[Crude Oil Analyst McNally: OPEC and Saudi Arabia do not want oil prices to rise to US$85 per barrel. Oil prices reaching US$80 per barrel will worry the White House. Iran and the epidemic are the biggest downside risks to oil prices]
[Citi: If OPEC+ continues to be conservative in increasing oil production, oil prices may soon rise above US$80/barrel]