How to price future crude oil contracts
Since the sharp drop in oil prices last week, the trend in oil prices this week has been relatively quiet. Although the U.S. oil rebounded in a short period of time due to the deteriorating U.S.-Saudi relations, the rate of increase is still relatively limited. This is because with the continuous decline in Iranian crude oil production andHow to price future crude oil contracts the advent of winter demand peaks, the market supply gap is gradually expanding, which has prompted the United States to seek OPEC production increases to make up for the shortfall in production.
Last night, OPEC’s rotating chairman of UAE Energy Minister Mazru stated that the United States did not ask OPEC to increase production in order to cope with the shortage of output in Venezuela and Iran. It stimulated oil prices to stop falling and rise more than 2 US dollars per barrel during the intraday trading. INE futures followed up overnight. Market observers say this helps ease expectations that global supplies will increase sharply, which has weighed on prices in recent weeks.
Urals transaction prices fell to their lowest level in four years. The decrease in Russian crude oil transportation has also put the tanker market further into trouble. These tanker markets have previously been embarrassed by the oversupply of tankers and OPEC production cuts.
An old saying is true that the market is more patient than most people. It always does its best to bring down the morale of most traders. As long as someone is willing to go against the market, the trend will continue for a long time. So, if you want to make more money than others, you must be more patient than most people.
Last week, the price of crude oil successfully broke the 70 mark due to the fermentation of the Middle East situation. However, due to Iran’s restraint, the United States did not further detonate the entire Middle East crisis after withdrawing from the Iran nuclear agreement. Therefore, the rise in crude oil is also very limited. The price of crude oil fluctuates around US$7 each week, and the two inventory data also unexpectedly offset between long and short. Recently, there was news that the United States would impose sanctions on Venezuela. This allowed crude oil bulls to temporarily gain profits and the current situation broke through. The 72 pressure level is only one step away, but the good news has clearly begun to weaken. Whether or not oil prices can make new breakthroughs in the future may depend on three major events in the market outlook.
In fact, the rise or fall of doHow to price future crude oil contractsmestic refined oil prices is determined by the Development and Reform Commission. When the international oil price exceeded US$40/barrel in 204, the domestic refined oil price was still firmly controlled. Therefore, the rise in international oil prices is positive for Sinopec and PetroChina, and its impact on rising domestic inflation should be relatively limited.
Oil prices have fallen successively, erasing the more than 4% increase recorded on September 8 last Thursday. Although U.S. crude oil inventories recorded the largest weekly decline in 999 years, prompting oil prices to rise last Thursday, traders said that the decline in U.S. crude oil imports was due to tropical storm Hermine which delayed the unloading of ships.
The overnight EIA inventory once again brought bad news to the crude oil market, and the previous API data was flat, which further expanded the decline in crude oil prices, which had been falling during the day. The intraday oil price fell by nearly $7, but it closed at the close. There has been a wave of significant increases in the past, making the intraday market only a small decline. However, such a negative effect still further affects the price of crude oil after the opening of the market on Thursday. After the opening of the market today, the price of oil directly returned to below $72 and fell. It is also gradually expanding in the morning. According to the current news in the market, it may fall to $7 again in the evening. Does this mean that crude oil prices will continue to fall afterwards?
Gene McGillian, vice chairman of Traditional Energy, said the strength of the US dollar is the source of pressure on oil prices. McGillian said that with the increasing risk of the United States withdrawing from the Iran nuclear agreement, crude oil has experienced a large risk premium, thus supporting the market.
Credit Suisse analysts said on Tuesday that even if Russia and OPEC oil-producing countries increase production, it may only increase by an additional 500,000 barrels per day. Therefore, by the end of 208, most developed countries’ inventories will be below the five-year average.