Crude oil trading reminder: Has it peaked? Government officials of various countries have expressed their views that oil prices have risen and fallen, paying attention to non-agricultural data

During the Asian session on Thursday (October 7), U.S. crude oil fell slightly to $77.22 per barrel; oil prices fell nearly 2% on Wednesday, and US inventories increased, prompting buyers to take a breather after the recent surge. Russia hinted that it was ready. To alleviate the global energy crisis, oil prices hit the biggest drop in two weeks, far away from the multi-year high just set.



During the day, we will focus on the number of layoffs by challenger companies in the United States in September and the number of initial claims for unemployment benefits in the United States as of October 2.

Negative factors affecting oil prices

[US crude oil inventories unexpectedly increase by 2.3 million barrels]

The U.S. Energy Information Administration (EIA) said on Wednesday that U.S. crude oil and gasoline inventories increased last week, as more offshore oil production facilities restarted after being shut down due to the storm last month, and output rebounded.

As of the week of October 1, crude oil inventories increased by 2.3 million barrels to 420.9 million barrels. Analysts surveyed by Reuters estimated a decrease of 418,000 barrels. Oil production has also increased, with an increase of 200,000 barrels per day in the last week, reaching 11.3 million barrels per day, which is not far from the peak of production set during the epidemic period, but the weekly data is considered less reliable than the lagging monthly data.

In addition, the supply of refined oil from refineries in the past four weeks was 20.7 million barrels per day, roughly in line with pre-pandemic demand levels. The supply of refined oil is a measure of fuel demand.

According to EIA, the refinery's refinery capacity increased by 329,000 barrels per day last week, and the capacity utilization rate rose by 1.5 percentage points to 89.6% of the total capacity.

Bob Yawger, director of Mizuho Energy Futures, said, “It seems that a lot of the increased inventory is being used for the refinery to increase the input of raw materials.”

According to EIA, US gasoline inventories increased by 3.3 million barrels this week to 225.1 million barrels. Analysts expect a decrease of 279,000 barrels. Distillate stocks, including diesel and heating oil, fell by 396,000 barrels to 129.3 million barrels, which is expected to decrease by 1 million barrels. According to EIA data, US crude oil imports increased by 1.4 million barrels per day to 4.9 million barrels per day, the highest since July 2020.

[The United States is considering releasing emergency oil reserves to curb soaring oil prices]

With the average gasoline price at US gas stations hovering at $3.19 per gallon (the highest in seven years), the White House is worried that rising fuel costs may hurt its political outlook before next year’s midterm elections.

When talking about the release of crude oil supply from the US National Strategic Petroleum Reserve, US Secretary of Energy Granholm said: "This is a tool under consideration." Analysts believe that the release of crude oil supply may stabilize the oil market and lower oil prices. Granholm said that the ban on crude oil exports is not ruled out. This is a tool we have not used, but it is also a tool.

[European natural gas prices soared 60% in two days and then plummeted, Putin expressed his attitude to change market sentiment]

European natural gas prices fluctuated sharply on Wednesday. After a two-day surge of 60%, they quickly fell. Russian President Vladimir Putin previously stated that the country is ready to help stabilize the global energy market.

Natural gas futures in the Netherlands and the United Kingdom fell more than 7%, after the market was increasingly worried about energy shortages in Europe, and futures prices once hit a record high. U.S. natural gas prices have also fallen by as much as 8.3%, and crude oil futures have also accelerated their decline. After a week of almost uninterrupted gains, prices quickly retreated, highlighting the extreme volatility of the energy market in recent days and also raising concerns about inflation around the world.

ICIS analyst Tom Marzec-Manser said, “Politicians have issued statements everywhere, bringing strong bullish and bearish factors to the market.” Some European officials said that lower-than-expected imports from Russia were the main cause of the crisis. But Putin said at an energy conference in Moscow on Wednesday that Gazprom will send more natural gas through Ukraine this year than the contract size. He said that the export volume to Europe in the first nine months of this year has approached a record, and if this momentum is maintained, a record high may be reached throughout the year.

[The Minister of Oil of Iraq stated that the oil price of US$75-80 per barrel is reasonable for oil-producing and consuming countries]

Iraqi Oil Minister Ihsan Abdul Jabbar said that for oil producers and consumers, a price of US$75-80 per barrel is a reasonable price. He added that Iraq is seeking to expand production and export capacity in the next few years.

Ihsan Abdul Jabbar stated at the Energy Intelligence Forum that Iraq’s goal is to increase its oil production capacity by about 3 million barrels per day to 8 million barrels per day by the end of 2027. Iraq also plans to increase its crude oil export capacity from the current 4 million barrels per day to 6 million barrels per day by the end of 2024.

Bullish factors affecting oil prices

[ADP data shows that the number of new jobs created by American companies has reached the highest level in three months]

The number of new jobs created by American companies in September exceeded expectations and the largest increase since June, indicating that as more and more Americans return to work, continuing recruitment difficulties have begun to ease.

According to data released by the ADP Research Institute on Wednesday, the number of employees in enterprises increased by 568,000 last month, and the revised data in August increased by 340,000. Bloomberg surveyed economists to estimate that the median value is an increase of 430,000.



The accelerated pace of hiring shows that it has become easier for companies to fill vacant positions after the federal supplementary unemployment benefits ended on September 6 and the reopening of schools allowed some parents to return to work. Even so, it will take more time to achieve a full recovery in the labor market, and the total number of jobs measured by ADP is still far below the level before the pandemic.

The U.S. Department of Labor will release its monthly employment report on Friday. It is currently expected that the number of non-agricultural employment in the private sector will increase by 450,000 in September. Although the ADP data does not always show the same trend as the Labor Department data, the acceleration of the data may indicate a strong performance in the September non-agricultural employment report.

In September, the number of employment in the service industry increased by 466,000, of which employment in the leisure and hotel and catering industries increased by 266,000.

Employment in the commodity production industry increased by 102,000, mainly driven by employment growth in construction and manufacturing, both of which recorded the largest increase in a year.

ADP chief economist Nela Richardson said in a statement, “As the health situation related to the new crown variant continues to improve, the current recruitment bottleneck should subside, thereby laying the foundation for solid employment growth in the coming months.”

[The U.S. stock market fluctuates and the Republican Party proposes to raise the debt ceiling in the short term]

The U.S. stock market fluctuated heavily, and Republicans proposed to the Democrats a plan to end the debt ceiling deadlock. The S&P 500 and Nasdaq 100 both moved higher, wiping out more than 1% losses.

The US Senate Republican leader McConnell said that he plans to raise the debt ceiling in the short term until December. Affected by a series of factors such as the debt ceiling, inflation, and rising energy prices, the S&P 500 Index fluctuates by 1% for the fourth consecutive trading day. .

Wells Fargo Securities strategist Anna Han said, "The latest news shows that the Republicans are willing to negotiate an extension of the debt ceiling, and stock and bond yields have rebounded. Although it is not completely resolved, the market is temporarily relieved."

ADP data shows that the new jobs in the United States in September were better than analysts expected, which further strengthened the market’s confidence in the Fed’s debt reduction next month. The strong employment report has eased worries about recruitment difficulties, but market volatility remains sharp, because people worry that inflation may last longer than the Fed expected, especially in the face of tight energy supplies this winter.



On the whole, the unexpected increase in inventories highlights the recovery of production affected by the hurricane, as well as the stance of government officials in various countries to curb the surge in oil prices, which may temporarily limit oil price increases; the non-agricultural data to be released on Friday will indicate whether oil prices can continue to rise. key.

GMT+8 8:16, US crude oil is now quoted at 77.22 US dollars per barrel.