Gao Jian said that even if it has reduced the scale of production reduction, there will still be a certain amount of production reduction. It is difCrude oil marketficult to fill the current market supply gap by relying solely on the increase in shale oil production in the United States, or even the increase in production in Brazil and Canada.
The U.S. Energy Information Administration EIA released a report on May 9 on Wednesday, showing that as of the week of May 4, U.S. crude oil inventories decreased by 270,000 barrels to 800 million barrels, a market estimate of a decrease of 790,000 barrels. Refined oil inventories in the United States fell by 70,000 barrels, and recorded a decline for 5 consecutive weeks. The market is expected to decrease by 50,000 barrels. U.S. gasoline inventories fell by 240,000 barrels, and the market estimated a decrease of 450,000 barrels.
As the U.S. off-season for oil consumption is coming to an end, global crude oil inventories have also been effectively reduced. As of now, global crude oil inventories are about 4.4 billion barrels, which has effectively decreased by 100 million barrels from the peak of 4.7 billion barrels in July 206. , Basically close to the 5-year moving average of OPEC and Russia’s production limit targets, and set a new low in the past year.
India signed an agreement with Iran to pay for oil in rupees last month, 50% of which is used for exports. However, if Iran wants to deposit rupee in Indian banks, it must set aside 40% withholding tax and other payments, and finally deduct 45% of the total deposit amount. To this end, India has deliberately announced an exemption order, and the payment of oil imports to the Iranian National Oil Company in rupees can be exempted from withholding tax.
Since OPEC decided not to cut production in 204, oil prices have plummeted. While Saudi Arabia’s strategy of squeezing American shale oil out of the market has worked, Saudi Arabia has also suffered large losses and is running out of cash reserves to make up for it. The budget deficit is the biggest reason for Saudi Arabia's loosening of its position. On September 5, during the G20 Hangzhou summit, Russia and Saudi Arabia stated that the two countries can limit production. After the two countries announced plans to cooperate, the distribution of oil once soared by about 6% to 44 US dollars per barrel. The market even thinks they will reach an agreement to limit production immediately.
To a certain extent, due to the invoCrude oil marketluntary decline in Venezuelan output, OPEC's performance on the agreement has exceeded expectations. In theory, Saudi Arabia and other major OPEC oil-producing countries can increase oil supplies, but they have not yet done so.
According to a CNBC report, Jeff Currie said that OPEC's production cut plan has drastically cut oil production from the very beginning, coupled with the decline in Venezuela and Iran's production, Russia is also accelerating production cuts, and the problem of oversupply in the global oil market has been alleviated.
The three consecutive declines in domestic oil prices are not unrelated to the recent continuous decline in international oil prices. At present, WTI crude oil in the United States has fallen by 77% to US$50.56 per barrel, and the price of Brent has fallen by 72% to US$55 per barrel.