Crude Oil Global Market Monthly Analysis by September 2016

International oil price in September was fluctuating with uptrend, but from the whole view it held steadiness. The major influencing factors include FED meeting and Frozen Production Meeting. By market close on September 29th, WTI 43.03-47.83 dollars/bbl, Brent 45.45-49.99 dollars/bbl.

Early the September, Russia and Saudi Arab agreed to colaborate on stabilizing oil market and increasing the possibility of limiting oil output. In addition, American crude oil inventory hit a 17-year low in a single week, pushing oil price to a big surge. At mid-September, EIA announced that global crude oil demand growth is slower than expected, and glut situation may extend to first half of the year 2017, added with concerns over possible growth of Negerian and Libya oil export, pulling oil price down. Late the September, American crude oil inventory once more slumped down unexpected, and FED announced no interest rate lift in September, and OPEC announced an agreement of limiting production has been reached, fueling oil price to rebound.



Market Forecast:

September 2016, WTI price weight gained 0.28 dollar/bbl than August, while Brent price weight down 0.01 dollar/bbl than August. WTI price average at USD45/bbl while Brent at USD47/bbl, flat from August.
Supply front, despite OPEC no longer sustain policy of non cutting production, the real output of both OPEC and Russia were still on a high track, besides, Libya and Iran are still with intention of growing their production. The downtrend of production in U.S. has been slowed remarkably, however the oversupply situation could not be altered soon. Demand front, US commercial crude oil inventory was decreasing for weeks but still stayed at above 500 million bbl level. Meanwhile, the refineries in Europe and US have entered turnaround season, followed with dropped utilisation rate. Economy view, Only China appeared with sign of turning well among global economies, with steadily running pace. Policy front, unclear foresight to interest rate lift by FED soften US dollars, which gave positive support to oil price. Geopolitical view, Middle East was relatively peaceful, with no marked influence. In spite of agreement of limiting production announced by oil producing contries, which has lifted the confience among traders, market still worried if it could be implemented, in addition, if the limited output volume is not as much as to relieve the pressure from glut, the fundamental bearish may extend. It is expected in October the international oil price still hard to surge.Supply-demand front will be still bearish, but end-bottom support maybe solid, which save it with limited space downtrend. Brent price may be running at USD45-52/bbl.






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