Understanding the dynamics of the oil market in the midst of energy congestion

Understanding the dynamics of the oil market in the midst of energy congestion

The natural gas crisis in Europe and Asia is helping to stabilize oil prices. The future of crude oil prices has risen as the oil market is under threat due to the growing energy crisis in key European and Asian countries, including China and India, which are increasing demand for alternative energy sources such as diesel.

Global energy congestion may seem to support boldness and inflation, but the overall impact on global economic growth is negative. China’s crude imports fell in September, and some traders’ prices rose as oil prices rose for several years. China’s crude exports fell 5 percent in September from about five million barrels in five months. However, oil prices have also been hit hard by the US dollar and the slowdown in the global economy.

IMF The global growth forecast for 2021 has fallen to 4.9 percent, down from 6 percent forecast in July, due to supply chain disruptions and inflationary pressures, which have hampered global economic recovery. Coronavirus outbreak.

OPEC + is doing everything in its power to ensure that the oil market is completely stable. “Our position is to increase production in line with market demand,” Russian President Vladimir Putin said at the Moscow Energy Forum last week.

EIA report

The EIA’s monthly report predicts that US crude oil production will fall more than expected in 2021 and fall back in 2022. Raw will drop from 260,000 bpd to 11.02 million bpd this year, and back to 11.73 million bpd by 2022.

Washers in all regions are now making a profit. In the United States, a positive crack in the upper and middle part of the barrel equals a weakness. Many of Europe’s major plants have been shut down for maintenance, and European economies have been boosted by low supply.

In the wake of the energy crisis, winter preparations could increase oil and gas flow to Asia.

Muhammad al-Shatti

Commodity markets in Asia are declining due to strong demand for road oil, as well as energy shortages in China’s refineries. Refined products all sell backwards. It shows an unlimited market for demand for fast-moving premium fuel from storage.

Inflation

Inflation in major economies has increased. Consumer inflation in the United States is up 5.4 percent annually in June and July, and 5.3 percent in August, the highest since July 2008. Similar trends are taking place in the European Union and the United Kingdom.

Sustained supply chain bottlenecks, labor market shortages, high inflation and rising energy prices, along with expected demand, strong economic recovery and infrastructure have all contributed to inflation.

Global mobility for gasoline and diesel fuel on the road provided an average supply of fuel for most of the world’s major oil consumers during the week to September 30 below pre-CV levels.

Strong refining demand in the United States could lead to lower crude oil reserves by supporting crude oil prices in the coming weeks.

In the wake of the energy crisis, oil exports to Asia, particularly China, are expected to fall sharply in preparation for winter.

North Asian markets import more than 12 percent a year, just like Europe’s LNG. Europe’s natural gas reserves are much lower than they were in 2020. Although low, European gas reserves are not low – October reserves were low in 2012 and 2013.

• George: Mohammed al-Shati is a Kuwaiti oil analyst.

Disclaimer: The views expressed by the authors in this section are their own and do not necessarily reflect the views of the Arab News.

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