Crude oil trading reminder: the rising trend continues! The price of natural gas has soared, the price of oil has risen fiercely, and the morale of the bulls is like a rainbow

During the Asian session on Wednesday (October 6), oil prices hovered at US$79.08 per barrel. API data released in the morning showed that crude oil inventories increased by 951,000 barrels; oil prices climbed on Tuesday, and U.S. oil continued to rise from a seven-year high to approach the 80 mark. Earlier, the world’s major oil-producing countries announced their decision to maintain restrictions on the supply of crude oil, and the soaring US natural gas price provided the impetus for rising oil prices.



During the day, we will focus on the number of ADP employment in the United States in September, the changes in EIA crude oil inventories in the United States as of October 1st, and the Federal Reserve Bostic's speech.

Bullish factors affecting oil prices

[S&P 500 and Nasdaq 100 index rebounded]

The US stock market rebounded from Monday’s decline, and the market assessed economic conditions before the non-farm payrolls report was released. The S&P 500 index and the Nasdaq 100 index rose, and large-cap technology stocks led the gains. Investors are anxiously waiting for the latest labor market data to find signals about the Fed’s next move. The US ISM service industry activity data is better than expected. It may make the Fed continue to move in the direction of announcing the reduction.

The return of the S&P 500 Index to above the 100-day moving average has helped alleviate concerns about market corrections. Prior to this, with high inflation, falling recovery indicators, the spread of the energy crisis and the deadlock in the US debt ceiling issue, worries continued to rise. Before the Nasdaq 100 index rebounded, its relative strength index fell to its lowest level since March.

David Bahnsen, Chief Investment Officer of The Bahnsen Group, a wealth management company, said, “Although some parts of the stock market have fallen more than others, the major stock indexes are still some distance from the real correction. These small market drops are mainly concentrated in overpriced. In the technology stocks of China, it’s impossible to cause undue concern."

Lauren Goodwin, economist and portfolio strategist at New York Life Investments, said, “The non-agricultural employment report will be released on Friday so that we can understand the impact of the delta mutant strain on the employment environment. We don’t expect this data to have any impact on the market. Significant impact; the number of new crown cases has dropped again, and the Fed’s comments indicate that as long as the data performs'good', they will reduce market support."

[U.S. service industry expanded faster than expected in September]

The expansion of service providers in the United States in September was faster than expected, thanks to the acceleration of business activities and the continuous growth of new orders. According to data released by the Institute of Supply Management on Tuesday, the non-manufacturing index in September rose to 61.9 from 61.7 in the previous month. Economists surveyed by Bloomberg estimated that the median value was 59.9.



The report shows that, as Americans spend more on eating out and traveling, although fears of the epidemic still exist, the degree is easing. The ISM non-manufacturing business index rose to 62.3 from a six-month low.

At the same time, recruitment difficulties and ongoing logistics challenges have led to inventory depletion. An inventory indicator fell to its lowest level in more than a year last month, and the number of unfulfilled orders increased.

ISM’s service sector employment indicators show that the growth rate of recruits slowed slightly in September. Friday's non-agricultural employment report is expected to show that the non-agricultural employment population increased by nearly 490,000 that month. ISM’s new order index was basically flat at 63.5, while the US service provider’s payment price index rose.

[U.S. natural gas futures prices are approaching a 12-year high]

U.S. natural gas prices are soaring as traders are concerned about global supply shortages. US natural gas futures rose 9% on Tuesday to the highest intraday level since February 2014, approaching a twelve-year closing high; natural gas prices in Europe and Asia hit record highs on Tuesday, continuing their months of gains, leading to US prices Synchronous rise. Many market participants worry that despite the expected mild winter, cold weather and more overseas exports may completely deplete natural gas supplies. As prices continue to climb, traders expect that electricity will shift from natural gas to oil or coal, which may also lead to tight oil supply.

Phil Flynn, a senior market analyst at Price Futures Group Inc., said, "If there is a cold winter, prices may rise sharply, and there is no room for error in the system."

Goldman Sachs Group predicts that due to high natural gas prices, power generation this winter may result in an additional 650,000 barrels of crude oil demand per day.

Gary Cunningham, head of market research at Tradition Energy, said that the global natural gas price surge may stimulate some power plants to switch from natural gas to oil, which means that crude oil prices may continue to be supported, although there may be a short-term correction, I think there will be some gains. Take it back...but we will usher in a winter when natural gas prices are very high.

Negative factors affecting oil prices

[IMF says the risk of hindering global economic recovery is rising]

The International Monetary Fund (IMF) said that due to the continued divergence of vaccine supply, accelerating inflation and rising debt, the global economic recovery faces more risks, and developing countries may be left behind.

IMF President Georgieva said in an online speech on Tuesday that compared with the 6% growth rate predicted in July, the IMF currently expects a slight slowdown in GDP growth rate. She believes that vaccines, inflation, and debt problems in low-income countries are getting worse, and this situation may last longer.

Georgieva said that since the last World Economic Outlook was announced in July, “risks and obstacles that are not conducive to the recovery of the global economy have become more obvious.” The IMF is scheduled to start next week at the IMF and World Bank annual meetings. A new forecast is released, and the annual meeting will be held in Washington with a combination of online and offline methods.

Georgieva added, “Most emerging and developing economies need many years to recover. This delay in recovery will make it more difficult to avoid leaving long-term economic scars.”

[Iran calls on the United States and Europe to lift sanctions against Iran to ease the global energy crisis]

According to a report by Iranian National Television on the 5th, Iranian Oil Minister Javad Ogi recently called on the United States and European countries to lift sanctions on Iran in order to alleviate the global energy crisis. After attending the 21st Ministerial Meeting of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing countries on the 4th, Ogi said that the United States and some European countries have hindered Iran’s oil exports for many years and Iran is not the only party paying the price. The border policy also has a negative impact on the people of the United States and Europe.

Ogi said that Iran is willing to increase oil production and stabilize the energy market. Policymakers in the United States and European countries should "learn lessons" and lift sanctions against Iran to alleviate the global energy crisis and allow countries around the world to obtain cheaper energy.

[API data shows inventory increase]

According to data released by the American Petroleum Institute earlier, as of the week of October 1, crude oil inventories increased by 951,000 barrels, gasoline inventories increased by 3.68 million barrels, refined oil inventories increased by 345,000 barrels, and Cushing crude oil inventories increased by 2 million barrels.

After the data was released, the response to oil prices was flat, with U.S. oil remaining above $79. Investors will pay attention to the crude oil inventory data released by the U.S. Energy Information Administration (EIA) on Wednesday to find further directions.



On the whole, oil prices have risen fiercely due to OPEC+’s insistence on increasing production and the surge in natural gas prices. Although the API data released in the morning showed an increase in inventories, the winter is coming, the expectation of increased demand and the market’s bullish sentiment are driven. The momentum of rising oil prices is unabated, and U.S. oil is expected to break above the 80 psychological barrier. Pay attention to EIA data in the day.

GMT+8 8:16, US crude oil is now quoted at 78.95 US dollars per barrel.