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Crude Oil Production is Limited, Global Energy Prices Soar


In the past week, international oil prices first fell and then rose. When the European and American stock markets fell sharply, the US and Burundi oil both fell by more than 2%, setting a new low in more than a week at that time. However, as the stock market bottomed out and crude oil inventories continued to decline, With tighter supply and improved demand prospects, oil prices have reversed their decline and recorded gains. U.S. crude oil closed up 2.77% this week, recording five consecutive positives on the weekly line, hitting a new high of $74.27 per barrel in the past two months. $73.95/barrel. In addition, many well-known investment banks have expressed bullish outlook for crude oil. Brent crude oil once again rose to near a three-year high, closing at $77.20 per barrel, the highest closing price since October 2018. The weekly increase was about 2.27%.

In recent months, global natural gas prices have soared due to increased demand, especially from Asia, low natural gas inventories, and tight supply of natural gas from Russia. The surge in global energy prices has caused a chain storm in the bulk commodity market. In particular, the global increase in natural gas prices has increased several times year-on-year, which has caused great chaos for downstream users. In the context of continuous production and transportation capacity constraints and high demand, the price of LNG in the European market is still soaring, and it is expected that there will be no relief in the short term in the future. After that, unpredictable winter weather may further affect the energy market environment. Energy information company Wood Mackenzie (Wood Mackenzie) vice president Valery Chow said that rising energy prices are not only a problem in Europe, the peak winter energy prices in Japan and South Korea may exceed the record set in early 2021.

Analysts pointed out that the abnormally cold weather that is expected to occur again in the northern hemisphere during the winter and this winter will also intensify the price storm in the natural gas market. ANZ Bank analysts said that due to the rise in natural gas and coal prices, the global utility sector switched to fuel oil, and the shutdown of the Gulf of Mexico after Hurricane Ida continued, which meant that the supply was reduced.

Citi analysts said in the report that in the coming weeks and months, global natural gas prices may continue to show a parabolic trend, with strong demand and insufficient supply leading to a sharp tightening of the market. Any unexpected surge in demand or supply disruption may push prices up further. Citigroup said that the ripple effect of soaring natural gas prices on other fuels is more extensive than initially thought. Switching to liquefied petroleum gas for heating will affect naphtha and gasoline. Increasing the use of kerosene will affect the prices of aviation fuel and diesel. Fuel oil will play a greater role in power generation. With global crude oil production limited, Europe The tight supply of natural gas will lead to an increase in oil demand.

This week (the week of September 27th to October 3rd) will usher in a number of heavy economic data, specifically, including durable goods orders from the United States in August, the Eurozone’s September prosperity index, and China’s September PMI , Eurozone September CPI data, US August PCE price index and US September ISM manufacturing PMI and other heavy economic data. In addition, we need to pay attention to the follow-up impact of the German election, the Japanese election, Fed Chairman Powell and many other Fed officials, European Central Bank President Lagarde and many other officials, the Bank of England Pele and the speeches of the US Treasury Secretary Yellen.

Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.

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