Despite the significant escalation of geopolitical tensions in the Middle East this week, which once briefly pushed up crude oil prices, the concern about economic recession has become the main market sentiment, and investors are worried about the demand for crude oil. Oil prices fell sharply on Friday, falling for four consecutive weeks, marking the longest decline since December last year.
Despite the significant escalation of geopolitical tensions in the Middle East this week, concerns about the US economic recession dominated market sentiment. Investors are worried about the demand side, and crude oil prices continue to fall sharply. Brent crude oil once hit a new low for the half year.
This week, major countries such as the United States, China and Germany saw a contraction in manufacturing PMI, and the extremely weak US non-farm payroll data released on Friday exacerbated market concerns and caused market sentiment to be depressed, triggering a sharp decline in oil prices.
During Friday's session, the Brent crude oil futures contract for December fell below the bottom of June 4 of $75.85/barrel, setting an intraday low not seen since February 7 and falling to $75.77/barrel. The decline in Brent crude oil reached at least 3.6% intraday, and US oil fell more than 4%, hitting a new low of less than $73/barrel.
As of the close on Friday, WTI September crude oil futures fell $2.79, or 3.66%, to $73.52/barrel, a cumulative drop of 4.72% this week. Brent October crude oil futures fell $2.71, or 3.41%, to $76.81/barrel, a cumulative drop of 5.32% this week.
This week is the fourth consecutive week of decline in the crude oil market, marking the longest decline since December last year. On Wednesday, due to the escalation of the Middle East tensions, WTI crude oil rose by 5% during the day, but gave up all the gains in the following two days.
The futures market also showed the low sentiment of investors in recent times. Data released by the US Commodity Futures Trading Commission (CFTC) on Friday showed that as of July 30th, speculators held a net long position in NYMEX WTI crude oil, with contracts decreasing by 27,320 hands to 211,917 contracts, a six-week low. Brent and WTI crude oil net long positions decreased by 93,065 contracts to 273,685 contracts, a seven-week low.
The latest survey results from the media on the same day showed that OPEC's oil production remained basically stable in July, with OPEC's average daily output in July at 26.99 million barrels, a decrease of about 0.06 million barrels compared to June.
The production situation of major member countries in July is as follows:
- Saudi Arabia's daily output in July remained basically at 9 million barrels, close to the OPEC+ production quota. Algeria and Kuwait also complied with their respective production targets.
- Venezuela and Iran were the main countries that reduced their production in July, although these two countries were not bound by the production reduction agreement. Venezuela's daily production decreased by 0.06 million barrels to 0.83 million barrels, while Iran's daily production decreased by 0.05 million barrels to 3.26 million barrels.
- The production of Iraq and the United Arab Emirates continues to exceed the agreed limit. Iraq's daily production increased slightly by 0.03 million barrels, reaching a total of 4.28 million barrels.
On Thursday, OPEC+, led by Saudi Arabia and Russia, did not make any specific recommendations at the online meeting of the Joint Ministerial Supervisory Committee (JMMC), which may indicate that they will maintain the voluntary additional production reduction plan unchanged as the next quarter begins. However, in a statement issued after the meeting, OPEC+ reiterated that the gradual cancellation of voluntary production cuts may be suspended or reversed depending on market conditions.
Media surveys show that there are different opinions among OPEC+ member countries, petroleum traders and analysts on whether OPEC+ will continue its planned increase in production. Some industry insiders predict that if the oil market continues to be weak, core OPEC+ member countries are likely to decide to delay the gradual cancellation of production cuts for one quarter, postpone the problem until later, and hope that demand will improve by then.
The JMMC will hold another online meeting on October 2. The OPEC+ countries will hold a ministerial-level joint meeting on December 1.
On Friday, oil giant ExxonMobil announced its financial report, with Q2 income and other revenue of $93.06 billion and adjusted earnings per share of $2.14, estimated at $2.03. The CEO of ExxonMobil said that he saw very strong oil demand, and global oil supply maintains a healthy crude oil price.