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SunSirs: The Surge of Crude Oil Storage in the United States ends the Intermittent Rebound of Oil Price

November 08 2019 13:15:10     SunSirs (Selena)

On November 6, WTI crude oil futures market in the United States fell to $56.35/barrel, or $0.88, while Brent crude oil futures fell to $61.74/barrel, or $1.22. The main reason is that crude oil inventories in the United States rose 7.9 million barrels last week, far exceeding analysts' previous average expectation of 2.7 million barrels.

Crude oil inventory reports continue to have a direct impact on crude oil prices, with API crude oil inventories showing a large surplus. The American Petroleum Institute (API) reported a huge surplus of 4.2 million barrels on Tuesday. Last week's surplus jumped to 5.7 million, while the EIA has reported a surplus in six of the past seven weeks. The market supply pressure is large, investors are generally pessimistic about the expected future supply growth, and the oil price should drop.

At the same time, investors are also digesting reports that Saudi Arabia will promote further production reduction of OPEC before Saudi Aramco (Saudi Aramco) goes public. At present, the market is not very optimistic about the implementation of OPEC+ production reduction, and the good news is exhausted. In addition, at present, the global economy is still a hot topic. The global economic growth slowdown and international tensions also help to lower energy prices. At the same time, crude oil production in the United States is also rising. All these factors are important reasons for crude oil pressure.

According to SunSirs, at present, the periodic rebound of crude oil is a temporary intermediary. Although the tension in international trade has been temporarily relieved, the root cause has not been effectively solved, which will be an important risk point for crude oil. Moreover, at present, OPEC+ does not continue to spread the news that is conducive to the oil price. Based on the surge of crude oil inventory in the United States, the oil price is already in a market atmosphere of partial emptiness. It is expected that in the near future, the main shock will still be weak.


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