Short-term supply or demand or oil price vane

In the second half of May, the international crude oil price continued to fluctuate around the level of 95 US dollars/barrel, showing a trend of a sharp decline. The Fed's position of withdrawing from QE3 and the expected changes in the market's exchange rate against the US dollar have become the main driving force in determining the trend of oil prices. On May 22, the Fed issued the minutes of the May meeting and the speech of Fed **Bernanke. Become a watershed in the fall of oil prices.

By the minutes of the Federal Reserve’s announcement of the May 22nd meeting and Bernanke’s parliamentary hearing, the market’s concerns about US monetary policy have dampened the rise in international oil prices. Taking into account the Fed's potential to reduce QE3, international oil prices began to decline since May 21. The official release of the minutes of the Fed’s meeting on May 22 showed that U.S. monetary authorities may begin to consider the gradual reduction of QE3 in the second half of 2013. Taking into account the economic data recently released by the United States shows that the US economy is recovering, the dual effects of economic strength and tightening monetary policy have pushed the US dollar stronger, which has led to a sharp drop in oil prices. On May 22nd, the spot price of WTI (West Texas light crude oil) on the New York Stock Exchange was at US$95.89/barrel, eventually closing at the lowest US$94.01/barrel on that day, a 2.1% decline on a single day; the May 23 probe continued. The lowest price of 92.21 US dollars / barrel, the cumulative decline of 3.84%. May 24 closed at 93.87 US dollars / barrel.

Looking back at the recent trend of international crude oil prices, the Fed’s future monetary policy has become a decisive factor in the international oil market. At present, the specific pace of the Fed tightening monetary policy has not yet been clarified. According to the information disclosed by the minutes of the Fed meeting, the withdrawal of QE3 may start as early as June and be carried out in stages. The slight consolidation of oil prices over the weekend showed that the sharp fall on May 22 has basically absorbed the impact of the Fed’s May meeting. Further follow-up impacts may occur before and after the Fed’s next meeting on interest rates in mid-June, which deserves our attention.

Since the macroeconomic data of countries in the first quarter of April-May was basically released, the direction of the US dollar monetary policy is also basically clear, so the long-term demand factors and the influence of monetary factors are likely to be a temporary paragraph. Looking ahead to the trend of oil prices this week, the impact of short-term oil supply and demand factors on oil prices will gradually emerge.

From the perspective of supply, non-traditional oil and natural gas supply growth continues to be an important factor affecting long-term oil prices. The IEA recently increased the expected level of global non-OPEC (OPEC) oil supply in 2013 to 54.5 million barrels per day, 1.1 million barrels per day over 2012, including an increase in the production of oil sands and tight oil in North America. Become the main part. In addition, the supply of crude oil in Iraq and southern Sudan has gradually resumed.

From the demand point of view, with the arrival of June, the peak of summer traffic fuel consumption will increase the demand for crude oil refining. In addition, the end of May and early June refinery companies spring inspections have also come to an end, combined with Saudi Arabia's new refinery companies, and Venezuela Amoi refinery production capacity recovery, which will further increase the demand for crude oil refining. IEA predicts that the demand for crude oil refining in May will increase by 3.6 million barrels per day compared with April. Driven by this, short-term oil prices may rise slightly to reflect seasonal fluctuations in oil demand. In addition, the trend of oil prices in the future will need to pay special attention to the ministerial meeting of OPEC member states held in Vienna on May 31st. At the meeting, the Minister of Energy of OPEC member states will discuss the current status of the oil market and its future prospects, which will largely determine the direction of changes in OPEC crude oil supply in the second half of the year. Considering the impact of non-OPEC supply, large-scale development of non-traditional oil and gas, recovery of supply in Iraq, and abundant supply of OECD crude oil reserves, OPEC did not have sufficient reasons to increase supply; instead, oil prices remained at US$95/barrel, away from OPEC. The target price of the price adjustment has a lower limit of 80 US dollars/barrel, so there is no reason to expect OPEC to significantly reduce the quota. Taken together, the outcome of this meeting is likely to maintain the original supply quota, or slightly adjusted.