Industrial Investment Crude Oil Weekly Review: Saudi Arabia takes the lead in reducing production and dispels doubts Oil prices may face downward pressure

Industrial Investmentcrude oilWeekly review: Saudi Arabia takes the lead in reducing production and dispels doubts Oil prices may face downward pressure
2017year1month10day
In the first week of the new year, oil prices showed a trend of bottoming out and rebounding, but still continued the upward trend in the medium term.OPECSaudi Arabia, the largest member country, led by example in implementing production cuts, stimulating positive sentiment in the market. Oil prices recovered most of the decline at the beginning of the week, but since then, oil price increases have been limited. Both crude oil prices in the two regions have remained at high levels with a narrow range consolidation, while US crude oil has remained at a high level53.60nearby;Brent crude oil is in the56.75Nearby,2017In the first week of trading, crude oil from both regions closed slightly lower.
In the first week of the official implementation of the production reduction agreement, Saudi Arabia set a positive example. According to a Gulf source familiar with Saudi Arabia's oil policy, last Thursday Saudi Arabia1The monthly production has been reduced at least48.610000 barrels/Solstice100610000 barrels/Day. Meanwhile, Saudi Arabian National Oil Company(saudi aramco )We have started negotiating with clients globally to2Saudi Arabia's crude oil supply on board decreases in the month3-7%The country has fully implemented itOPECProduction reduction agreement. Saudi Arabia's first reduction in production and implementation of the production reduction plan undoubtedly sends a good signal to the oil market. Both regions have seen their first increase in crude oil prices.
Additionally,OPECMember country Nigeria12The monthly crude oil output also unexpectedly decreased. Data shows that Nigeria last year12Monthly crude oil daily production decreases2010000 barrels to14510000 barrels/Today, the previous three consecutive months of upward trend have come to an end. Due to continuous attacks by armed militants on the country's oil infrastructure over the past year, this African country has been struggling to restore its production capacity. It should be noted that Nigeria isOPECSeveral companies with exemption from production reductionOPECOne of the countries, but the country not only did not increase production, but also experienced a decline in production, which provided support for oil prices.
However, after just one day of rebound, oil prices have come to a standstill again, as the market is still unwilling to add long positions in crude oil until all oil producing countries implement production cuts. In other words, although Saudi Arabia has currently reduced production, it is still questionable whether other member countries can reduce production as scheduled. Goldman Sachs, an investment bank, also issued a warning that the market needs to be cautious of countries such as Iraq and Libya. The situation of production cuts in Iraq remains opaque, and the Kurdish autonomous region of the country refuses to reduce production. The southern region has not shown any signs of production cuts yet. So the implementation of the prospect of production reduction will continue to be the most important factor in whether oil prices can continue to rise in the future. If there is no positive news of other oil producing countries reducing production this week, or if there are member countries increasing production, oil prices may face the risk of a pullback.
Moreover, the number of oil drilling platforms in the United States has been showing a growing trend, and the increase in shale oil production in the United States poses a significant threat to the future balance of the oil market. According to the number of Baker Hughes oil drilling platforms in the United States, as of1month6During the current week, the total number of active drilling wells in the United States increased to529Seat, refresh2015year12The new high since the beginning of the month marks the tenth consecutive week of increase. Due to the increase in drilling volume in the United States, crude oil production in the United States has increased from2016Since the low point of the year, it has increased by more than4%to88010000 barrels/Day. Although the current production is relatively low2015The annual peak is still low8.74%But with the continuous growth of drilling platform data, US crude oil production will also soar, which may cause a heavy blow to oil prices.
Last week's heavyweight non farm data led to a significant increase in the US dollar, but its impact on oil prices is limited. The US dollar's trend this week may still not have a significant impact on oil prices. This week, in addition to regular crude oil inventories and the number of drilling platforms, there are alsoEIAMonthly short-term energy outlook report released. The report's attitude towards the outlook of the crude oil market may provide guidance on the current high and volatile oil prices.
Technically, US crude oil has maintained a strong and volatile trend at a high level, with good upward momentum but already overbought. If it cannot reach a new high this week, the possibility of a mid-term correction will increase. The overall upward trend of the daily chart remains intact,5/10The daily moving average provides support, but54.50There is significant pressure on the front line, and in the short term, the main focus is on a pullback and a long position, with high altitude as a supplement. However, if repeated upward explorations fail to break through54.50Nearby levels may reverse short-term strength. support53.25/52.20/51.00Resistance54.50/55.30/56.00。
Brent crude oil continued to stabilize with the support of resistance conversion in the early stage, remaining bullish, but the random indicator overbought, successfully stabilizing last week5Above the weekly moving average, it is expected to open up further upward space this week. If it falls below this level, it may lead to a medium to short-term correction trend. On the daily chart, there may be a slight slowdown in action, but there is no sign of a pullback in the random indicators, and the main trend is to buy long with a pullback, breaking above the previous high point57.20It is expected to expand the increase. support55.50/54.00/52.80Resistance57.20/58.80/59.30。