International oil prices soared 45!
On Thursday evening, Beijing time, the US and Buffalo oils rose rapidly. According to Reuters quotes, WTI crude oil futures rose over 30% at one time, while Brent crude oil futures rose up to 45% at most. The two oil companies have now narrowed their gains. Brent crude oil futures have narrowed the gain to 20.7%, and WTI crude oil futures have risen 26.34%. On the other hand, U.S. oil stocks also expanded. Schlumberger rose 13.11%, ConocoPhillips rose 12.34%, Halliburton rose 11.74%, Royal Dutch Shell rose 11.21%, and Chevron rose 9.79%.
Crude oil "three kingdoms kill" a new turn, Saudi Arabia, Russia or return to the negotiating table
Suddenly, the "three nations killing" of crude oil appeared to have a new turn for the better. The latest attitudes of the three parties in the United States, Russia and Saudi Arabia are of concern.
On the one hand, market sources point out that Trump expects Saudi Arabia and Russia to reduce output by 10-15 million barrels per day. According to the Saudi News Agency, the Saudi Crown Prince had a telephone conversation with Trump on the oil market.
On the other hand, earlier this evening, Russian Energy Minister Novak stated that Russia's current increase in crude oil output would be the wrong approach. Nowak also confirmed that Putin and Trump discussed the impact of the decline in the oil market, crude oil demand and prices on Russia and the United States. Earlier market news pointed out that Russia ’s crude oil output in March was 11.294 million barrels per day, a decrease of 0.1% year-on-year and a decrease of 0.1% month-on-month.
The Saudi side's attitude has also undergone a key change. According to the Saudi News Agency, Saudi Arabia has called for an emergency OPEC + conference. The Saudi side said that OPEC + should seek a fair agreement and said that OPEC + would restore the necessary balance in the oil market.
Of course, the above news has not yet received an official response, and the attitudes of Saudi Arabia and Russia need to wait for an official statement.
U.S. mediates, Trump tries to save shale oil industry
In addition to actively mediating before Saudi Arabia and Russia, Trump is also committed to consulting and cooperating with domestic oil giants in an attempt to jointly maintain a balanced oil market.
According to foreign media, citing people familiar with the matter, US President Trump is scheduled to hold a meeting with some of the largest oil companies in the United States on Friday to discuss what measures the government should take to help the industry survive the unprecedented oil crisis.
Two people familiar with the matter also revealed that Trump and executives will discuss potential assistance to the oil industry, including imposing tariffs on oil imported from Saudi Arabia into the U.S. and abandoning a requirement to use U.S. ships between U.S. ports The Law on the Carriage of Goods including Oil-The Jones Act.
Some analysts believe that the reason Trump is so enthusiastic about the oil price war is that the US shale oil industry is almost unsustainable. According to the latest news, US shale oil company Whiting Petroleum announced on Wednesday (April 1) that it has filed for bankruptcy with the court, becoming the first company to file for bankruptcy due to oil price war.
Many analysts believe that the tragedy of Whiting Petroleum is just the beginning of a major rout in the US shale oil industry. According to the Norwegian energy industry consulting firm Rystad Energy, although U.S. shale oil companies have been able to cut their average production costs from almost $ 82.75 per barrel in 2012 to about $ 43.83 per barrel, there are only 16 shale oil The company can make money with oil prices below $ 35 / barrel.
Seeing that the shale oil industry is facing such a severe test, it is not difficult to understand why Trump is so concerned about the oil price war.
The market is changing too fast? Two crises prompt concessions from Saudi Arabia and Russia
The rapid changes in the market have caught many investment banks and analysts by surprise. Martijn Rats, a global crude oil strategist at Morgan Stanley, had previously predicted that oil prices may need to fall below $ 10 / barrel to rebalance the market.
"Whether the model predicts a decline in global crude oil demand of 15 million barrels per day, 20 million barrels per day, or even 25 million barrels per day, these are not important. What is important is that all the results show that the global free oil storage space will be at 5 The month or June runs out. So the only way to balance the market is to let the price of oil fall enough to reduce supply. "
Now that Saudi Arabia and Russia's attitudes have softened, short bears believe that they must be quite worried.
Some analysts point out that the continuous decline in crude oil demand and the limited energy storage of crude oil make countries realize that not reducing production as soon as possible to restore the oil market balance will bring a devastating blow to the entire industry. Ryan Seaton, Commissioner of the Railroad Commission (RRC), Texas ’s highest energy regulator, recently pointed out that the world needs to reduce output by 20-25 million barrels of crude oil in order to prevent the oil market from crashing.
The financial blog Zero Hedge pointed out that under the dual blow of the oil price war and the epidemic recently, there has been an oversupply of crude oil and it has led to a sharp increase in inventory pressure. Standard Chartered analysts such as Emily Ashford warned in a report that global oil storage space will be filled in six weeks, which may force the closure of large-scale crude oil production on an unprecedented scale.