As the world's attention is focused on A-shares, in a corner of the globe, the crude oil market is also surging undercurrents, and oil prices are quietly rising again!
Oil prices hit new highs
Since the end of September, due to heightened concerns over a possible attack by Israel on Iran's energy infrastructure, the price of WTI oil has risen by more than $5 per barrel, from $66 to over $75, and even briefly broke through $77 this week.
However, the logic of the high point is untenable: On the morning of the 8th, there were reports on social media platforms that the Israeli Air Force had attacked Iran, but as of now, no mainstream media or reliable sources have confirmed this, so the increase was quickly erased.
Although it was just a feint, this wave of growth has made the increase in crude oil futures since the end of September expected to exceed 10%, but what surprises many market observers is that, considering the recent series of significant geopolitical events, a mere 10% increase seems somewhat sluggish.
It is estimated that if Israel targets Iran's oil facilities, up to 4% of the world's supply could be at risk.
Goldman Sachs said that a continued decline in Iran's production could drive oil prices up by $20 per barrel, while Swedish bank SEB warned that in extreme cases, oil prices could rise to more than $200 per barrel.
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Oil prices fluctuate at high levels, and the market is generally bearish
During the third quarter, both the IEA and OPEC downgraded their energy demand growth forecasts, and poor economic data in Europe and the United States triggered investor concerns about the prospects for the economy and energy demand.
In addition, poor energy demand data from China and the potential recovery of crude oil supply from Libya after the easing of domestic political struggles have led to multiple bearish factors putting pressure on oil prices.Overall, international oil prices may generally exhibit a trend of fluctuating downward movement. News negatively affects market sentiment, and moreover, domestic demand is relatively weak, offering little support to the market, with gasoline and diesel prices showing a continuous downward trend.
Entering the traditional "Golden September" peak season, but the recovery of demand is not as expected, coupled with the expansion of international oil price declines in the middle and early months, causing market bearish sentiment to continue to rise.
In addition, China's economic growth is running at a low level, with low demand in infrastructure and manufacturing industries, and the acceleration of new energy replacement for transportation vehicles, among other factors, leading to a significant contraction in diesel demand. Gasoline demand also tends to stabilize as the summer season ends.
Therefore, the market generally has a bearish view on oil prices.
Tight situation high data, watershed has emerged
In fact, since the beginning of the Israeli-Palestinian conflict on October 7 last year, the oil market has been limitedly disturbed, and oil prices are still under pressure due to increased production in the United States and low demand in China.
However, this sentiment may change recently. Iran's recent ballistic missile attack on Israel has intensified tensions in the region. In recent days, industry observers have sounded the alarm, warning that supplies "will face a real threat."
Although some industry analysts believe that if Israel targets Iran's oil infrastructure, OPEC+ has enough spare production capacity to make up for the interruption of Iran's exports, the remaining global oil production capacity is still mainly concentrated in the Middle East, especially in Gulf countries. If a larger-scale conflict worsens, these countries may face risks.
US economic data also supports oil prices. The market is expecting the Federal Reserve to start a rate-cutting cycle, and there will be two more rate cuts this year. The US non-farm employment data for September exceeded expectations at this time!
The data released by the US non-farm employment in September reached 254,000, while the market's general expectation was 140,000; the unemployment rate in September was 4.1%, expected to be 4.2%, and the average hourly wage reached 4%, while the expectation was 3.9%.Overall, the non-farm employment data for the United States in September greatly exceeded expectations, which clearly demonstrates that the U.S. economy remains robust, signaling to capital not to leave. This is undoubtedly positive for oil prices!
With significant changes in the Middle East situation, investors are once again betting on further increases in crude oil prices, which inevitably fills one with curiosity about the future trend.