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International Crude Oil Futures Rise Amid Tensions in Iran
The tense situation in Iran, the British Marines' seizure of a ship carrying Iranian crude oil bound for Syria, and the extension of the production cut agreement by the OPEC alliance pushed up oil prices, but mixed economic data also limited the rise in oil prices.The extension of the agreement by OPEC and the production cut alliance only boosted oil prices temporarily. The reduction in US crude oil inventories was offset by the increase in total inventories. The market is still worried about the slowdown in demand growth, and international oil prices fell this week. In the past week, the first-month futures of light sweet crude oil on the New York Mercantile Exchange fell by $0.96, a drop of 1.64%; the average settlement price per barrel was $57.55, $1.055 lower than the previous week, with the highest settlement price of $59.09 per barrel and the lowest settlement price of $56.25 per barrel; the trading range was $56.04-60.28. The first month futures of Brent crude oil on the London ICE fell by $2.32, or 3.49%. The average settlement price per barrel was $63.76, $2.14 lower than the previous week. The highest settlement price was $65.06 per barrel and the lowest was $62.4 per barrel. The trading range was $62.09-66.75.
The situation in Iran is another concern for the oil market. On July 4, the British Navy seized a supertanker named "Grace 1" in the waters near the overseas territory of Gibraltar on charges of transporting crude oil to Syria, violating the EU sanctions against Syria. Reuters reported that this was the first time Europe had seized a tanker suspected of violating EU sanctions against Syria. Later that day, the Iranian Ministry of Foreign Affairs urgently summoned the British ambassador to Iran to express protest, saying that this was an illegal seizure. According to Iran's semi-official media Mehr News Agency on the 5th, Rezai, secretary of Iran's National Interests Committee, said on the same day that if Britain did not return the Iranian tanker illegally seized in Gibraltar, Iran would take retaliatory measures.
The economic data was mixed, which still meant that economic growth may slow down. The just-released German industrial orders for May fell far more than expected, and the German Ministry of Economy said German industrial orders may remain weak in the coming months. At the same time, US government data showed that new orders for US factories fell for the second consecutive month in May, sparking economic concerns. However, data released by the US Department of Labor showed that US non-farm payrolls increased by 224,000 in June, the highest level in five months.
A Reuters survey showed that OPEC's daily crude oil production fell to its lowest level in five years in June, and the increase in Saudi Arabia's crude oil supply failed to offset the losses caused by US sanctions on Iran and Venezuela and production failures in other OPEC members. In June, OPEC's 14 member countries produced 29.6 million barrels of crude oil per day, 170,000 barrels less than the revised daily crude oil production data in May. OPEC's total daily crude oil production is the lowest since 2014.
The survey showed that although Saudi Arabia increased production under pressure from the US President to lower oil prices, Saudi Arabia's daily crude oil production is still lower than the amount promised in the production cut agreement. Saudi Arabia's daily crude oil production in June was 9.8 million barrels, far below the country's promised production cut limit of 10.311 million barrels, but an increase of 100,000 barrels from the revised daily crude oil production in May. The survey showed that the 11 OPEC member countries participating in the production cut agreement in June this year had a compliance rate of 156%. The OPEC members Iraq, Kuwait and Angola participating in the production cut agreement reduced their daily crude oil production, while Venezuela, Libya and Iran, which had no obligations to fulfill the agreement, all saw a decline in their daily crude oil production. Iran's average daily crude oil exports fell from 2.5 million barrels in April to less than 400,000 barrels. Due to the US sanctions on Venezuela's national oil company, Venezuela's daily crude oil production fell slightly in June.
Nigeria's daily crude oil production also increased, and the country's daily crude oil production has exceeded the target production promised in the production cut agreement.
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