Earlier, US President Trump has repeatedly called on oil-producing countries (OPECs) and other oil-producing countries to increase production to lower crude oil prices. However, after the major OPEC and non-OPEC oil producers meeting held last Sunday, they did not issue a statement on increasing production.
Since then, international oil prices have continued to strengthen. After Monday's close, at 19:30 on the 25th, Beijing time, Brent crude oil futures price rose 0.54% to 81 US dollars per barrel, and New York crude oil futures price rose 0.44% to 72.39 US dollars per barrel. Market participants pointed out that oil-producing countries have not reached consensus on increasing oil production or continue to boost international oil prices, and the crude oil market will face a supply gap in the next three to six months.
US pressure is invalid
On Sunday, OPEC and non-OPEC oil producers met in Algeria. The failure to form a consensus on increasing production was an important incentive for international oil prices to rise. The oil-producing countries “disregarded†the remarks made by US President Trump’s request to “reduce oil prices†and did not intend to increase crude oil production immediately.
According to foreign media reports, representatives of major oil producing countries said that the participating parties reiterated 100% compliance with the goal of reducing production. In the case that OPEC and non-OPEC oil producers have agreed to increase oil production in June, it is impossible for participants to suggest further increases.
Saudi Oil Minister Khalid Falih said that the global crude oil market is balanced, so measures that affect oil prices will not be taken. He pointed out that Saudi Arabia has spared no effort to increase crude oil production, but "not now" may not be necessary next year, because according to OPEC's forecast, non-OPEC production growth may exceed global demand growth. The interim report released by OPEC predicts that the supply of non-OPEC oil producers led by the United States will increase by 2.4 million barrels per day in 2019, while global oil demand will only increase by 1.5 million barrels per day.
Falih pointed out that the focus is turning to 2019. It has already seen the prospect of an increase in inventory in 2019, which is caused by a substantial increase in supply from non-member countries. "The news I got was that the supply of crude oil was sufficient. I don't know which refineries that need crude oil could not get crude oil. Given the quantity seen so far, it is very unlikely to increase production in 2019 unless there is any accident on the supply and demand side."
Russian Energy Minister Alexander Nowak also believes that there is no need to immediately increase crude oil production. Trade disputes and US sanctions against Iran are bringing new challenges to the crude oil market.
Institutions bullish oil prices and energy stocks
Institutions in the industry are now bullish on oil prices and energy stocks.
Harry Chirin Gillian, head of commodity strategy at BNP Paribas, pointed out that oil producers are reluctant to increase production, and the market will face a supply gap in the next 3-6 months, which will cause oil prices to rise.
JPMorgan Chase also predicted in the latest market outlook report that US sanctions against Iran in the coming months are likely to trigger oil prices to rise to $90.
Bank of America Merrill Lynch analyst Francisco Blanche said in a newly released research report that the price of Brent crude oil in 2019 is expected to increase by $5/barrel to $80/barrel; the price of WTI crude oil in 2019 is expected to increase. 2 US dollars / barrel, to 71 US dollars / barrel. Blanche pointed out that the supply shortage in the oil market is expected to reach 400,000 barrels per day in 2019, which is higher than the previous estimate of 300,000 barrels per day. The decline in Iranian crude oil supply due to US sanctions may be higher than previously expected. The Brent crude oil price target at the end of the second quarter of 2019 was raised from $90/barrel to $95/barrel. He also pointed out that there is an increase in the possibility of a surge in oil prices similar to 2008. If Brent crude oil breaks through $120/barrel, demand for crude oil in emerging markets may be severely damaged.
Fidelity Investment Group pointed out that the prospect of energy stocks is worthy of investors' attention. According to the S&P 11 big item data, the energy sector rose by 1.47% this Monday, which is the best performance of the day. More subdivided data showed that the energy equipment and services sector rose 0.78% on the day and performed well in all segments.
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