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Increasing demand worldwide Oil price close to $ 100?

Status: 23.06.2021 3:10 p.m.

Oil is more expensive than it has been in two years. Experts warn of a supply crisis: The prices for crude oil and thus also gasoline, kerosene and heating oil could soon rise much higher.

From Angela Göpfert, tagesschau.de

Oil prices hit new multi-year highs this week. For the first time in two years, a barrel (159 liters) of the North Sea Brent cost more than $ 75 again. For a barrel of the US West Texas Intermediate (WTI) variety, more than 73 dollars were paid on the market – the highest amount since October 2018. Rising oil prices – something that businesses and consumers may need to get used to. According to some experts, the new multi-year highs in oil prices, which many consumers are already feeling painfully at gas stations or when buying heating oil, are just the beginning of a longer upward trend in the oil market.

Analysts predict rising oil prices

The experts at the US investment bank Goldman Sachs expect the Brent price to rise to $ 80 this summer. But that is not the end of the story. An oil price of $ 100 is a “real possibility”. Alex Sanna, top oil trader at Glencore, the world’s largest commodity trading group, also said, according to the Financial Times, that an oil price of $ 100 is becoming increasingly likely.

The experts at JPMorgan even see a new oil super cycle looming and recently renewed their forecast of an oil price of $ 190 in 2025.

Demand congestion as a price driver

Francisco Blanch, raw materials expert at Bank of America, may not look quite that far into the future. For this he has the most precise 100-dollar forecast ready: the oil price could crack the round mark as early as 2022. The market hardly changes on the supply side – and this in turn is offset by an immense backlog of demand. It is easy to explain where this backlog of demand comes from: Just as many private households restricted their consumption during the pandemic, so too many companies put the necessary investments aside. Now that the global vaccination campaign is gaining momentum, at least in the major industrialized countries, consumers, companies and economies have a lot to catch up on.

Delta variant is a risk factor

The more relaxed Corona situation and the awakening global economy are leading to higher demand for crude oil, gasoline, diesel – and kerosene. Oil expert Blanch sees the rising travel industry as a major price driver.

The delta variant of the virus from India, which could lead to a further tightening of the corona measures, is currently also posing a risk to the economy.

Signal of a shortage of supply

In search of signs of whether demand is actually exceeding supply at the moment, it is worth taking a look at the market for so-called oil futures. Current oil futures contracts are quoted there higher than contracts with delivery at a later point in time. Such a constellation, referred to by experts as “backwardation”, is rather unusual and a clear indication of fear of scarcity – “and thus for further rising prices”, as market expert Robert Rethfeld from Wellenreiter-Invest emphasizes.

A price corrective called fracking

The rising prices should actually make re-entry into the oil market attractive for the US shale industry. In the past, the US frackers acted as flexible price correctors on the oil market: If prices rose, more shale oil was drilled in the short term, supply increased, prices fell again.

As a reminder, the last time oil traded above $ 100 was in 2014, when a rapidly growing supply from the US fracking industry brought an abrupt end to the last oil super cycle.

Sustainability trend slows US oil industry

But this mechanism doesn’t seem to work that well anymore. This is due on the one hand to the new US President Joe Biden, who imposed a stop on oil and gas drilling on state-owned land in January, and on the other hand to the global trend towards sustainable investment.

“The number of active US oil wells is increasing only slowly,” emphasizes wave rider expert Rethfeld. “The investors do not want to see an expansion of the production capacities at the moment, but instead demand investments in renewable energies.”

Iran as a risk factor

The production countries of the OPEC + oil cartel, especially Saudi Arabia and Russia, could benefit from the West’s climate policy. It remains to be seen how willing they are to expand production to fill the void left by the US oil industry.

Especially since there are supply risks on the part of OPEC: “After the election of an ultra-conservative cleric as the new president, Iran will have a hard time overturning US sanctions and increasing oil exports,” said Eugen Weinberg, raw materials expert at Commerzbank .

Inflation Risks Before Revaluation?

Should the oil price actually rise further towards 100 dollars, this would inevitably lead to a reassessment of the inflation risks in the financial markets, since the oil price is one of the main drivers of consumer prices.

Just yesterday, Jerome Powell, head of the US Federal Reserve (Fed), told the House of Representatives budget committee again that the Fed was considering the current high inflation rates a temporary phenomenon considered. However, market expert Rethfeld emphasizes: “Any oil price above $ 100 would suggest to the public that Powell is wrong.”

=====Spot gold market trend analysis=====

On Tuesday (June 15), international gold prices are expected to stabilize, ending the previous two consecutive days of decline, as the dollar’s fall has boosted the attractiveness of safe-haven gold. Investors are waiting for the results of the Fed meeting to find new clues to reduce the scale of bond purchases. The strategist said: “Technically speaking, gold has fallen below the key support level and appears to be entering a bearish trend… This means that the market may be ready to withstand the Fed’s gradual reduction in asset purchases.” Investors wait for the Fed’s upcoming announcement on Wednesday. Results of the new policy meeting. According to the survey, nearly 60% of economists said that the Fed will release the highly anticipated debt reduction plan in the next quarter. It is also worth noting that the US May retail sales data will be announced later in the day. Previously released data showed that soaring consumer prices in the United States benefited gold, which is often seen as a tool to hedge against inflation. The price of gold closed down mainly because the market was worried that the Fed would reduce QE ahead of schedule before the Fed’s decision. Some investors began to reduce the long positions they had previously established, which put downward pressure on the gold price in the short term. The rise of Bitcoin has led to a slowdown in the outflow of cryptocurrency funds, which is not conducive to the price of gold.

From a technical point of view, the daily level of gold prices rebounded on Monday, and European and American gold prices suffered a sharp drop, hitting the lowest level since May 17, and they rebounded strongly after hitting 1845, the intersection of the 10-day moving average and crossing the 200-day moving average. , And recovered most of the decline, and finally closed at 1866.16. The daily line recorded a bardo line with a long lower shadow. The MACD and KDJ dead cross signals continued, and the 10-day moving average crossed the 20-day moving average to form a dead cross. The gold price rebound failed to regain the upward trend line of 1873 in early May. There is still a risk of falling again in the short-term. Initial support is concerned about the daily low of 1858.7. This position is also close to the lower track of the Bollinger Band. If it breaks below, the price of gold may once again step on 1845 for confirmation. Support; on the whole, gold prices may currently face the greatest downward pressure since the rebound at the end of March. The future trend will largely depend on the Fed’s statement. Before then, gold bulls are expected to remain weak; however, As the price of gold started a strong rebound after it gained support near 1845, the short-term bearish signal has also weakened. If the price of gold can remain above the lower rail of the Bollinger Band 1860, there is still a chance for the price of gold to counterattack further. First, pay attention to the resistance near 1873. The price of gold needs to stabilize this position to effectively reverse the current weakness. Further resistance is near 1888. This position is at the same time the middle of the Bollinger Band and the 10-day moving average. If it breaks through, the price of gold will have the opportunity to hit the 1900 mark again. On the whole, today’s short-term operation thinking Wang Jinyao suggests to rebound from the high altitude, supplemented by the callback low and more. The top short-term focus is on the first-line resistance of 1878-1883, and the bottom short-term focus is on the first-line support of 1845-1850.

===== International crude oil market trend analysis=====

On Tuesday (June 15), international oil prices rose and are expected to rise for the fourth consecutive trading day. With the delay in negotiations for the United States to rejoin the Iran nuclear agreement, the prospect of Iran’s provision of additional supplies to the market soon fades away. The United States and Iran, as well as other parties to the 2015 Iran nuclear agreement, resumed indirect discussions in Vienna last Saturday (June 12). The return of the United States to the agreement will pave the way for the lifting of sanctions on Iran, which will enable the Organization of Petroleum Exporting Countries (OPEC) member states to resume crude oil exports. The Organization of Petroleum Exporting Countries and major oil-producing countries (OPEC+) including Russia have been reducing production to support oil prices. ING said: “Additional supply from OPEC+ will be needed in the second half of this year, as demand is expected to continue to recover.” Encouraged by the obvious signs of rapid global economic recovery and continued reductions in production by US shale oil producers, hedge funds took long positions in oil last week. Raise to pre-pandemic levels. Analysts said: “The technical indicators on the daily chart currently show that crude oil is in the overbought zone and may be pulled back.” He said that investors and traders are also paying attention to the results of the two-day Fed meeting that began late Tuesday. , In order to find the signal when to start reducing monetary stimulus. Three sources familiar with the situation said that under pressure from labor unions and including U.S. senators from his hometown of Delaware, the Biden administration is considering how to reduce the burden of biofuel blending on U.S. refineries.

From a technical point of view, from a daily perspective, crude oil relied on the MA5 daily moving average to rise on the next day, and then fell back slightly after setting a new high during the intraday session. A small sun with a shadow line was recorded, the Bollinger band opened up, and the oil price was running at the upper middle. Track, moving average and long positions are arranged, operating below the oil price to form support, the support below focuses on the opening level of this week, and then the moving average horizontal support. From a 4-hour perspective, crude oil showed a slow upward trend the next day, and then fell back after a short puncture on the upper track. It held high and sideways. The Bollinger Bands are currently in an open period. After the MA moving average is arranged in a long position, the MA 5-10 daily moving average Moving forward, the KDJ stochastic indicator hooks upward in three lines, the MACD indicator diverges, and the fast and slow lines move forward in parallel. On the whole, crude oil is currently insufficient to rise in the short term, or it will rise after a wave of retracements. On the whole, today’s short-term operation thinking Wang Jinyao suggested to call back low and high, supplemented by rebound high altitude, the top short-term focus on the 72.5-73 resistance, the bottom short-term focus on the 68.5-69 first-line support.

Gold Information:

On Monday (June 14), the US dollar index changed little, and investors turned to the Fed’s policy decision to be announced on Wednesday, which may reveal clues as to when the Fed will reduce its asset purchases. The price of gold fell on Monday. Spot gold fell as much as 1.7% at one point, setting a four-week low to $1,84.95 per ounce. Some investors worried that the Fed might outline the path to shrinking its expansionary monetary policy at its two-day meeting this week; However, in late trading, the price of gold rebounded by more than US$20 from the day’s low and rebounded to around US$1866. Some analysts predict that if Fed Chairman Powell maintains the view that inflation is only “temporary” and does not withdraw monetary stimulus, gold prices should be able to regain lost ground. Phillip Streble, chief market strategist at Blue Line Futures, said investors may have taken some gold positions before the Fed’s policy meeting that began on Tuesday. The Fed may hint that they will begin to shrink, which should put pressure on gold. He added that the Fed is already “withdrawing” liquidity from the system, which should also put pressure on gold. He was referring to the surge in the size of the Fed’s reverse repurchase operations last week. Friends who are interested in gold and crude oil investment but have no way of starting or are already in contact but are not ideal, pay attention to Artemisia mongolica to “adopt the situation” to obtain the latest financial information, daily market trend analysis, real-time trading strategy and medium and long-term layout.

Spot Gold·London Gold Market Analysis

From the perspective of the weekly line, the weekly line closes the small Yin line and is currently operating near and above the short-term line. The 5-week and 10-week moving averages are still moving upwards. The medium-term line is chaotic and directionless. MACD is moving upwards, KDJ is glued, and the indicators have no obvious direction. . The weekly rebounded from around 1676 to the highest around 1917, breaking through the downward trend line pressure. The weekly closed the two-week small Yinxian, but the resistance was not obvious. It is still possible to continue to fluctuate above the 10-week moving average and pull up to a new high. In the future To turn short in the mid-term, you need to break below the stable 10-week moving average, and the short-term line is glued, so that it can really turn to the short, otherwise it will oscillate in the high range, and may even pull up to a new high. From the perspective of the daily line, the gold daily line closes the Yin line and is currently running above the lower rail. The 5-day and 10-day moving averages are running downwards, the mid-term line is running upwards, MACD is running downwards, and KDJ is running downwards. The indicators are bearish. Gold dived again on Monday, falling from above 1877.89 to near 1844.2, closing at US$1865.8 per ounce. Obviously closed, the daily line looks like short-term shocks and bearishness, but if it fails to break through the 1855-1917 range, it will not go out of the general direction. In the end, it will fall below the 1855 line and close the line to confirm whether it is really empty in the future. It is necessary to break the daily high of this year to further open up the upper space. In summary, today’s short-term operation Jiang Xian suggested rebounding from the high altitude as the main, and the callback is supplemented by the low and more callbacks. The top pays attention to the first-line resistance of 1883-1888, the bottom pays attention to the first-line support of 1855-1850, and then the 1840 support level.

Crude oil information:

Oil prices rose slightly in the late trading session, hitting a high in more than two years earlier in the session. The increase in US crude oil production and the delay in restarting in the UK reduced expectations for fuel demand growth and tight supply. According to a forecast by the U.S. Energy Information Administration (EIA), shale oil production, which accounts for more than two-thirds of total U.S. production, is expected to increase by approximately 38,000 barrels per day to approximately 7.8 million barrels per day in July. The market reacted negatively to this. Phil Flynn, a senior analyst at Price Futures Group, said that the opening performance was strong. Given the high vaccination rate, the demand situation is expected to accumulate momentum. Subsequently, the EIA report caused the momentum to fade. Brent crude oil futures touched US$73.64 per barrel earlier, the highest since April 2019; US crude oil futures touched US$71.78 per barrel earlier, the highest since October 2018. The International Energy Agency (IEA) said on Friday that global demand is expected to return to pre-pandemic levels by the end of 2022, faster than previously expected. The IEA urges the OPEC+ alliance formed by the Organization of Petroleum Exporting Countries (OPEC) and its allies to increase production to meet demand. Motor vehicle traffic in most parts of North America and Europe is returning to pre-pandemic levels, and as blockades and other restrictions are relaxed, the number of flights on board has also increased. However, later on Monday, the UK postponed plans to cancel most of the remaining restrictions for one month, due to the rapid spread of the more contagious Delta variant virus.

Futures crude oil · U.S. crude oil market analysis

From the weekly perspective, oil prices closed for 3 consecutive weeks. The K-line is in a long position. Oil prices will continue to rise. According to the current turbulent trend, oil prices will not accelerate and it will be difficult to pull back. Therefore, we will continue to move upwards this week. Still relying on MA5 to show a bullish upward trend, below can focus on the 69.3 support. US crude oil opened at the 70.728 line on Monday. After the opening, the oil price saw a shock increase, and the highest was given to the 71.664 line. The daily line included a big Yang line, the high price broke the previous high, the low price did not Breaking the previous low, there was a bullish trend. The moving average system was arranged by bulls, running below the oil price to form a support. The oil price broke the previous resistance at 66.8 and continued to rise. The overall performance is in a bullish trend. From the 4-hour level, the Bollinger Bands are opening upwards, oil prices are running on the upper middle track, and the long moving averages are arranged, running below the oil price to form support. The lower support focuses on the opening level of this week, and then the moving average horizontal support. To sum up, Jiang Xian recommends that the operation is mainly low and low, and rebound is supplemented by high altitude. At the top, focus on the 72.0-72.5 first-line resistance, and the bottom support will focus on the 69.3-68.8 first-line support.

This article is contributed by Jiang Xian. I interpret world economic news, analyze global investment trends, and have in-depth research on crude oil, gold, silver, and other commodities. Due to the delay of online push, the above content is personal advice, and online postings are time-limited. Sexual, for reference only, at your own risk, please indicate the source for reprinting.

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