Energy news: 07/09/2022
Information from the Commodity Exchange of Vietnam (MXV), the commodity market showed mixed movements on yesterday’s trading day (September 6), with the green color mixed on the price list of all 4 groups of raw materials. Whether. However, the selling was very strong in many important commodities. The MXV-Index dropped by more than 1.5% to 2,535 points.
Energy group led the general trend of the whole market. Besides the negligible increase of WTI oil, all remaining petroleum products fell sharply to very strongly. Natural gas lost 7.3%, to 8.15 USD/MMBtu, the lowest level in nearly 1 month. Facing strong fluctuations of world commodity prices, domestic investment cash flow still showed stability. The transaction value of the whole Department was recorded at VND 4,300 billion.
Crude oil dropped due to pressure from supply and demand information
Oil price was under pressure again in yesterday’s trading session on September 6, when the market no longer received supportive information. Specifically, Brent oil price was 2.52% down at $92.83/barrel while WTI price was almost unchanged at $86.88/barrel.
In the first session of the week, the market received much support with the expectation that the Organization of Petroleum Exporting Countries and its allies OPEC+ will release policies to support prices such as production cuts. However, the 100,000 bpd figure, which is only equivalent to the increase in production in September, only pushes the OPEC+ output target to the August figure, not enough to maintain the upward momentum of oil prices. After approaching the resistance at 90 USD/barrel, oil price was once again under strong selling pressure and has now returned to the bottom within 6 months.
Accompanying the technical selling was the news that Saudi Arabia said it cut the official selling price (OSP) for crude oil exports in October 2022. Specifically, for the Asian market, Saudi Aramco reduced the price by nearly 4 USD/barrel, the first decrease in 4 months. Customers in Northwestern Europe also benefited, with Arab Light prices currently just $2.7 per barrel higher than Brent prices.
Information on the price of Saudi Arabia’s oil products is always interested in the market, because oil price increases and decreases always partly reflect actual supply and demand in the market, or at least the expectations of suppliers. the world’s leading oil supplier. The decrease in OSP shows that Saudi Arabia expects customers’ oil consumption in the near future will not be too high, so it is necessary to reduce selling prices to increase competitiveness or stimulate demand. Currently, with the Covid-19 epidemic still spreading in China, and the Government of this country has not yet relaxed epidemic prevention measures, it is highly likely that the oil consumption data of the world’s second largest importer. will not be able to be positive next month, despite China’s proposal to increase a series of market support packages yesterday. Currently, the number of international flights in and out of China is still at a record low, only about 100 flights/day, compared with 2,600 flights/day before 2020. This partly explains why the OPEC + countries cut a small amount of oil production in the last meeting.
Copper price prolongs the recovery
At the end of the session on September 6, the metal market recorded mixed movements. For precious metals, silver and platinum continued the previous session’s recovery. Silver prices rose slightly 0.15% to $ 17.90 an ounce, platinum rose relatively strongly 1.91% to $ 833.9 an ounce.
In the base metals market, COMEX copper closed at 3.46 USD / pound after gaining 1.42% yesterday. Concerns about tight supply increased after both of the world’s top copper miners, Chile and Peru, which account for about 50% of global copper, both reported weaker July output compared to the previous month. and compared to the same period last year. Meanwhile, global copper smelting activity rebounded slightly in August thanks mainly to South America, Europe and Africa, offsetting weak output in China. Its global copper dispersion, a measure of smelter activity, rose to 48.6 in August from 46.5 in July. The South American dispersion index rose again. 52.1 in August from 37.7 the lowest level since December 2021 the previous month. Weak supply while copper smelting activity gradually recovered, boosted the buying force and supported the price
In contrast, iron ore prices weakened again with a decrease of 0.89% to $97.02 per tonne, despite the Chinese government’s strong stimulus commitments in the third quarter. A series of large cities such as Chengdu and Shenzhen continue to be “locked down” because of the epidemic, which has raised concerns about disruption in construction investment activities and put pressure on iron and steel demand.
Expectations of prosperity of the domestic steel industry