Due to concerns about weakening crude oil demand from various countries, oil prices fell by more than 2% on Wednesday, reaching their lowest level in more than three months.
US crude oil fell $2.04 per barrel to close at $75.33 per barrel, a decrease of 2.6%.
Brent crude oil futures settled at $2.07 per barrel, closing at $79.54 per barrel, a decrease of 2.5%.
Market News Analysis
Oil prices have reversed their upward trend, and there may be encouraging signs of inflation in the United States. Forexlive, a financial website, stated that it is too early to make predictions about next week's US CPI data. But as oil prices reverse the upward trend since the Middle East conflict, so should CPI. The recent drop in oil prices should seriously affect November's CPI, and it is not impossible for both October and November's CPI monthly rates to reach 0.1%. In addition, the annual CPI rate in October may be lower than 3.5%. We are likely to see inflation in the United States below 3% within three months. This is clearly good news, but the Federal Reserve is more focused on core inflation, especially core service inflation. The best signal may come from the bond market. The yield of the 10-year treasury bond bond fell to 4.51%. Today's auction demand is quite good, indicating that real funds are following the pace of interest rate cuts and may feel a decrease in inflation.
ING analysts Warren Patterson and Ewa Manthey stated in a report to clients that "the crude oil supply market is clearly not too concerned about the possibility of supply disruptions in the Middle East, but rather focuses on balanced easing
Market sources quoted data from the American Petroleum Institute late Tuesday as saying that US crude oil inventories increased by nearly 12 million barrels last week, which also put pressure on oil prices. If confirmed, this will be the largest increase since February. However, the US Energy Information Administration (EIA) has postponed the release of weekly oil inventory data until November 15th.
The EIA stated on Tuesday that US crude oil production will be slightly lower than expected this year, but oil consumption will decrease by 300000 barrels per day, reversing the previously predicted growth of 100000 barrels per day.
Weak demand has caused investors to worry. Brent crude oil has fallen below $80 per barrel for the first time in more than three months, with a weak fuel demand outlook overshadowing concerns that the Middle East crisis may lead to supply disruptions. In the Israeli-Palestinian conflict, oil prices once soared to over $90 per barrel. But currently, as the supply in the Persian Gulf has not been affected by the conflict, people's attention has shifted to macroeconomic deterioration and weak oil fundamentals, and the demand situation in the United States and Europe is not optimistic. Data from China, the world's largest crude oil importer, shows that its total exports of goods and services have contracted faster than expected, exacerbating concerns about the outlook for energy demand.
Multiple institutions have stated that due to the rapid changes in gold prices, the short-term risks of relevant industrial enterprises have rapidly increased. Based on risk management needs, futures and options tools can be considered to protect profits. Wang Ying, a researcher at Zhongyan Futures Investment Consulting Department, told reporters that the decline in international oil prices is mainly due to the lower than expected recovery of overseas economies, such as the US unemployment rate exceeding expectations in the past two months and the accelerated contraction of the new order index. Meanwhile, there have been no signs of tightening on the supply side. In the long run, the supply and demand pattern is relatively loose, but there may be a possibility of production reduction on the supply side in the short term, and there may be some support for prices
The Bank of Canada stated in its meeting minutes released today that the conflict between Palestine and Israel has increased the risk that oil prices may remain high or further rise.
Focus on financial data and events on Thursday (Beijing time)
① 09:30 China's October CPI annual rate
② 16:35 Bank of Japan Governor Kazuo Shibata in an interview
③ 21:30 Number of initial claims for unemployment benefits for the week from the United States to November 4th
④ 22:30 Federal Reserve Bostick and Barkin deliver speeches
⑤ The next day at 00:00, Federal Reserve Barkin delivered a speech
⑥ The next day at 01:30, European Central Bank President Lagarde delivered a speech
⑦ At 03:00 the next day, Federal Reserve Chairman Powell delivered a speech
