In fact, before Saudi Aramco officially conducts its IPO, Saudi Arabia hopes to establish a stable and balanced oil market. For a healthy market consistent with long-term capital investment, both too high oil prices and tCrude oil trading TD Ameritrade platformoo low oil prices are not good for Saudi Arabia, which means that Saudi Arabia may lead to abandon opportunities to expand supply while maintaining prices in existing channels This will be reflected in the near-term production reduction target, and this situation may continue for some time before and after the IPO.
Despite the recent decline in US crude oil inventories, production continues to grow. According to data released by the U.S. Energy Information Administration EIA on June day, in the week of May 25, U.S. crude oil production increased by 40,000 barrels to 0.79 million barrels per day, a 4 consecutive week of growth. The monthly output reached 0.47 million barrels per day, the highest monthly record.
Some sources said that OPEC and non-OPEC will continue to maintain the agreement to cut production until the end of 208 or even longer, but if necessary, adjust the level of production cuts. This will temporarily fade the haze of increased production that has plagued the oil market recently and bring effective support to oil prices.
First, the situation in Venezuela must continue to deteriorate. Currently, Venezuela’s oil production has fallen sharply, and the country is currently facing an economic crisis, food shortages and soaring inflation. OPEC data shows that in April this year, the country's crude oil production fell to a multi-year low of 505,000 barrels per day. Croft believes that Venezuelan output will continue to decline at the current rate.
O'Loughlin said: With stocks returning to normal levels, the oversupply situation of the past few years seems to have ended. The deteriorating local economic situation in Venezuela has led to a sharp drop in oil production, which has made OPEC's current output lower than expected.
According to China Petroleum.com, the current crude oil price is still barely above the safety line relying on the only bottom support or the helpCrude oil trading TD Ameritrade platform of the US dollar, but this is not a long-term solution. It will continue until the OPEC meeting, and the crude oil market may continue. Weak market, unless there is unexpected good news in the market to break this pattern. Otherwise, crude oil prices will not rise significantly in the short term.
It is worth noting that with the rise in crude oil prices, the breakeven price of US shale oil has also risen significantly. In this regard, Jiang Caichao said that, unlike conventional oil and gas resource extraction, 90% of the production capacity of shale oil wells will be released in the first two years of oil well production.