Low oil prices rise, but it is difficult to change the trend of decline, multiple profits follow, the 50 pass is at stake.
On Wednesday (September 4th), the low international oil price picked up during the Asian session, recovering some of the downtrend in the previous trading day, but overall it was still not optimistic. Manufacturing data triggered worries about global economic weakness, and international trade disputes continued to drag investors' confidence.
Global economic weakness, pressing demand outlook
The international trade situation is still weighing on the prospect of global economic development. The United States announced that manufacturing activities for the first time in August have shrunk for the first time in three years, and the shrinking of orders, production and recruitment activities has pushed this high-profile manufacturing index to its lowest level since January 2016.
Financial APP data show that the United States in August ISM manufacturing PMI actually released 49.1, expected 51.2, the former value of 51.2. The data fell to its lowest level since January 2016, the first time since August 2016.
Williamson, an economist at IHS MARKIT, a market research firm, said that the final value of manufacturing PMI in August was the lowest since the 2009 financial crisis. Output and new orders index were the lowest in ten years, indicating that manufacturing performance in the third quarter may drag down economic growth.
On the other hand, the data released earlier showed that the eurozone's manufacturing activities shrank for the seventh consecutive month in August.
John Kilduff, partner of Again Capital in New York, said this deterioration continued to weaken the growth prospects of oil demand, weakening optimism because of declining demand.
Trump again spoiler, oil market facing troubled times
Meanwhile, Trump issued a stern trade warning to Asian trading partners in tweet on Tuesday, which is a drag on crude oil.
VATFX said crude oil futures fell to a week low. It looks like a massacre. The fundamentals are not strong enough to predict that the US crude oil price may fall below 50 US dollars / barrel.
Coupled with previous hurricane Dorian endangering the east coast of the United States, Florida, Carolina and other places have issued evacuation orders, it is learned that the hurricane will not cause much impact on production, but will cause a certain loss of market demand, and therefore unfavorable oil prices go up.
OPEC production rises and overplays the dilution of the Iranian nuclear crisis
On the other hand, the survey shows that the OPEC production has increased for the first time since the start of production reduction in 2019, and France has taken the lead in resolving the Iranian nuclear crisis. The market has been worried about the outdated supply of worries, which has suppressed oil prices, and the short-term oil prices are facing further downside risks.
In August, OPEC's oil production increased for the first time this year because of the increase in oil supply from Iraq and Nigeria, more than the decline in Saudi Arabia's production and the US's sanctions against Iran.
OPEC, Russia and other non OPEC+ members agreed last December that they will cut output by 1 million 200 thousand barrels per day from January 1st this year.The share of OPEC reduction is 800 thousand barrels per day, which is borne by 11 member states, excluding Iran, Libya and Venezuela.
Data released in September 2nd showed that Russia's oil output rose to 12 million 940 thousand barrels in August, reaching the yield limit promised by the yield reduction agreement and hitting the highest since March. Nevertheless, Russian energy minister Novak said in a statement that Russia's goal is to fully comply with the agreement reached in September. The agreement decided to continue to reduce the oil production of OPEC and some non OPEC oil producing countries.
It is noteworthy that the efforts of France and Iran to try to save the Iranian nuclear agreement are gaining momentum. The envoy of the Iran government returned to Paris. Officials imply that measures will be taken to restore some of the key oil exports in Iran, which means that the pressure on the supply side of the crude oil market may further suppress oil prices.
Focus on two crude oil inventory data Foreign exchange trading agent
Recent international trade tensions are showing signs of warming again. Data released by the Bank of Korea on Tuesday showed that economic growth was lower than expected in the second quarter, and exports declined due to international trade tensions. Therefore, investors need to be concerned about the delayed release of us API and EIA inventory data on Thursday.
Looking back at the figures released last week, the US EIA crude oil output increased by 200 thousand barrels per day to 12 million 500 thousand barrels per day in the week ending August 23rd, and the market is worried about oversupply or resurfacing the crude oil market.
VATFX said that oil prices will be difficult to achieve substantial progress this week, because the trade situation has not made progress. Asian data is weak, and OPEC's determination to control output may collapse.
Finance and economics APP warned that the current unfavorable factors for global growth prospects are also bad for oil. Only a large reduction in inventory can delay the fall in oil prices. This week's us API and EIA inventory data will be postponed until Thursday, due to the US labor week holiday. Investors need to remain concerned.
According to the software of the market, at 11:10 Beijing time, the US oil company reported $54.14 / barrel, a 0.37% increase in the day, and $58.42 / barrel in the oil market, or 0.27% in the day. Oil prices have fallen by about 20% from the peak hit in April 2019. Fears of further fermentation of international trade will continue to weaken oil demand.