On November 12, the market bet that the Fed would raise interest rates early to combat inflation. The dollar index rose to 95.266, its highest level since late July 2020. Demand for fourth-quarter oil fell while US shale oil supply rose, putting pressure on the oil market.
On Friday, November 12, the market bet that the Fed would raise interest rates early to combat inflation. The dollar index rose to 95.266, its highest level since late July 2020. OPEC cut its fourth-quarter demand forecast and raised its US shale oil supply forecast for next year, putting pressure on the oil market.
NYMEX crude oil futures fell 0.69 percent to $81.03/barrel, while ICE Brent crude oil futures fell 0.73 percent to $82.22/barrel.
“The US dollar may remain strong until the market fully digests the Fed’s accelerated monetary policy tightening expectations, which may not be until mid-2022,” said Leona Liu of DailyFX in Singapore. The strong dollar may get stronger first. Withstand rising oil prices While rising energy costs and rising inflation may benefit oil prices, they may also limit the market’s upside potential.
This week, the major markets moved nearly $4.
Demand is improving, and air travel is increasing, but the tightening of monetary and fiscal policies and the upcoming winter in the Northern Hemisphere will restrain demand.
To slow the rise in oil prices, the Biden administration may release the US Strategic Petroleum Reserve.
“The market is in a delicate balance,” said Justin Smirk, senior analyst at Western Pacific Bank. He said that while market supply is stable, demand is changing in kinetic energy. The market has shifted from a strong recovery driven by commodity demand to a service demand-driven recovery.
The Organization of Petroleum Exporting Countries (OPEC) reduced its forecast for global oil demand in the fourth quarter of 2021 due to high energy prices.
OPEC forecasts an average oil demand of 99.49 million barrels per day in the fourth quarter of 2021, down 330,000 barrels per day from the previous month.
OPEC also increased its forecast for US shale oil production next year, expecting 610,000 barrels per day in 2022, up 200,000 barrels per day from last month.
Increased investment by manufacturers due to rising oil prices.
According to a government source, the Indian Ministry of Petroleum has asked ONGC.NS to sell 60% of its two major oil and gas fields to private companies to increase production.
India’s dependence on foreign oil has risen to over 80% as domestic oil refining capacity grows, but oil and natural gas production stagnate.
India ranks third in oil consumption and imports. It has been asking ONGC to increase production for years to cash in on its oil and gas reserves quickly.