To put it simply, it is unlikely that oil prices will return to $50 next week. Oil prices lack the necessary conditions for rising—supply exceeds demand, and prices are determined by demand. In the context of sluggiSpot price of selected crude oil in Western Canadash global economic markets and weak demand, major oil-producing countries continue to increase production and increase oversupply. As far as the current situation is concerned, crude oil prices still have room to fall.
The United States will begin to impose economic sanctions on Iran in August, and will announce more sanctions in the month. Earlier, US officials stated that the US hopes that all its allies will stop importing any oil from Iran starting on the 4th. Iran’s two major oil buyers, South Korea and Japan, are negotiating with the US government to obtain immunity from sanctions. As a crude oil exporter, Iran may face an economic crisis.
The IEA estimates that non-OEPC production in 208 will increase by 800,000 barrels per day, more than double the 700,000 barrels per day in 207. Both the U.S. Energy Information Administration EIA and OPEC have predicted that U.S. crude oil production will exceed 10 million barrels per day this year. Today IEA also made the same prediction.
Here, OPEC is continuously reducing production, but here the US oil production is constantly increasing. This makes the progress of the entire crude oil market very slow, and may even regress again. The crude oil inventory data in the past two weeks has also ended the continuous decline. , Inventories began to increase sharply, all because of the impact of the surge in oil production in the United States, of course, there is also a saying that the expansion of oil production in the United States has also increased market demand.
In addition, the strong US dollar overnight also affected the oil market, and the market is also paying attention to the results of the UK's recent Brexit referendum. Polls show that the Brexit camp has a leading approval rating. Bookmakers have also lowered the odds for Brexit.
This price difference indicates that global oil supplySpot price of selected crude oil in Western Canada has become very tight, although the United States has surpassed Saudi Arabia and rivaled Russia despite rising production. PriceFuturesGroup analyst Phil
According to EIA estimates, the average daily output of the United States next year is expected to reach 500,000 barrels per day, exceeding this year’s 0.7 million barrels per day. The surge in U.S. oil production has directly brought about a significant increase in oil export demand and export volume. Once the volume of US oil exports goes up, it means that LNG shipbuilding orders and shipping business will increase significantly.