On Tuesday (December 12th) in New York, international oil prices significantly fell, both falling more than 3% to their lowest level in nearly six months.
The specific market situation shows that the WTI crude oil futures price in the United States fell by 3.9%, and is currently reported at $68.50 per barrel; Brent crude oil futures prices also fell nearly 3.8% to $73.14 per barrel, both recording their lowest levels since June 28th, and the weekly chart is set to break out of eight consecutive negative periods.
Earlier in the day, a cargo ship flying the Norwegian flag was hit by a cruise missile launched from an armed controlled area in Yemen, about 60 nautical miles north of the Strait of Mand, and the cargo ship caught fire and was damaged. This event was expected to provide support for oil prices, but the market has found that concerns about oversupply and slowing demand are putting significantly greater pressure on oil prices.
This week, the International Energy Agency, OPEC, and the US Department of Energy will all release their latest market fundamentals assessments. The International Energy Agency previously stated that as supply increases, the tension in the oil market is lower than expected. PVM Oil Associates analyst Tamas Varga said, "Market sentiment remains negative, with no help provided on the demand side. The fundamentals are disappointing."
In terms of supply, several OPEC+member countries announced at the beginning of the month that they will continue to voluntarily reduce production in the first quarter of next year, with a total daily output reduction of 2.2 million barrels. However, the analysis points out that OPEC+announced a "voluntary production reduction" rather than a "collective production reduction", reflecting its internal differences and raising doubts from the outside world about whether member countries will follow up and implement the production reduction.
The latest media monitoring of communication tracking data also shows that Russia's sea freight crude oil exports increased significantly in the week ending December 10th, jumping to the highest level since early July.
Analysts at energy consulting firm Rapidan Energy also predict that the average daily crude oil production in the United States next year will reach 13.3 million barrels, setting a new historical high. This data is not only higher than the average daily production of 13 million barrels in 2023, but also higher than the historical record of 13.2 million barrels per day set in September this year.
Yesterday, Western Oil announced that it will acquire US oil and gas producer CrownRock LP for $12 billion, marking the third heavyweight deal announced by the US energy industry in the past two months.
Many market participants are beginning to worry that under the pressure of sustained production increase in the United States, OPEC+may abandon its production restrictions in the short term and provide a large amount of supply to the market to weaken the growing competitiveness of US producers. Citigroup's bulk executives even warned that this could lead to a halving of international oil prices next year.
Earlier this day, the United States released its last CPI report for the year. Nathaniel Casey, investment strategist at wealth management firm Evelyn Partners, said that the inflation report is very in line with expectations, but progress towards achieving the central bank's 2% inflation target seems to be slowing down.
Investors are now waiting for the outcome of Wednesday's Federal Reserve meeting, and the market generally expects the central bank to continue to hold its ground. Seema Shah, Chief Global Strategist at Xinan Global Investment, stated that CPI is not sufficient to confirm or prove market expectations for policy easing, especially when the labor market remains so stable.
At the same time, the negotiations on COP28 among countries were also a focus of attention. Many representatives called for the "gradual phasing out of fossil fuels" at the meeting, but most oil exporting countries and developing countries strongly opposed this. At present, representatives are waiting for a new draft agreement.