Despite a decrease in Saudi Arabia's supply in September, concerns about an overall increase in OPEC exports have led to a continued decline in crude oil futures in Europe and the United States.

Tuesday (August 8th)

The September 2017 futures settlement price of West Texas Light Oil on the New York Mercantile Futures Exchange was $49.17 per barrel, a decrease of $0.22 or 0.4% from the previous trading day, with a trading range of $48.86 to $49.79;

The settlement price of Brent crude oil for October 2017 on the London Intercontinental Exchange was $52.14 per barrel, a decrease of $0.23 or 0.4% from the previous trading day, with a trading range of $51.82 to $52.73.

ION Energy analyst Kyle Cooper believes that in the absence of major geopolitical events, oil prices cannot continue above $50 per barrel, and market fundamentals determine oil prices to fluctuate between $45 and $55.

The energy ministers of OPEC member states held talks in Abu Dhabi to discuss the implementation of production cuts.

Tim Evans, an expert in energy futures at Citigroup Futures, said in a report that although we still feel that OPEC's production reduction fulfillment rate is limited, oil producing countries are discussing this year's production reduction fulfillment issue in Abu Dhabi to ensure that the production reduction fulfillment situation has improved. In fact, OPEC's production reduction fulfillment situation is already quite good by historical standards.

However, the oil market is tilting towards the lower end of its recent trading range, with OPEC production growth mainly due to the resumption of production in Libya and Nigeria.

On August 8th, OPEC released a report titled "Special Consultation between OPEC and Non OPEC Joint Technical Committees and Some Oil Producing Countries in Abu Dhabi".

The report states that the purpose of this meeting is to discuss the implementation of the extended production reduction agreement that came into effect on July 1, 2017.

Given that the UAE will assume the rotating presidency of OPEC in 2018, this meeting held in the UAE is of great significance for the comprehensive implementation of the production reduction agreement and the timely adjustment of OPEC and some non OPEC production.

The OPEC report points out that at the recent meeting of the OPEC and Non OPEC Joint Ministerial Monitoring Committee held in St. Petersburg, Russia, the Ministerial Monitoring Committee requested the Joint Technical Committee to hold another technical level meeting with some OPEC and non OPEC oil producing countries to further enhance the implementation of production reduction agreements, accelerate the rebalancing of the global oil market, and benefit oil producing countries and consumers.

Therefore, at this meeting, the United Arab Emirates, Iraq, Kazakhstan, and Malaysia introduced their respective production situations and prospects, in order for the Technical Committee to further evaluate the development of the oil market.

The above four countries fully support the existing monitoring mechanism and will cooperate with the Ministerial Monitoring Committee and Technical Committee in the coming months to achieve the goal of fully fulfilling the production reduction agreement.

The report states that this discussion was conducted in a constructive atmosphere and was fruitful, and the conclusions of the participating countries will fully contribute to the commitment of the "Cooperation Declaration".

The conclusion of this meeting will be submitted for further discussion at the 7th meeting of the Technical Committee held in Vienna on August 21, 2017.

Reuters quoted sources as saying that Saudi Arabia reduced its daily crude oil allocation to its global customers by at least 520000 barrels in September.

And Saudi Arabia promised to reduce crude oil production by 486000 barrels per day in the production reduction agreement reached by OPEC last year.

For Asian customers, Saudi Arabia reduced its crude oil supply by 10% in September.

Analysts believe that Saudi Arabia has promised to normalize global oil inventories at all costs, and significantly reduced its supply to customers in September, in line with this promise.

At the end of July, the 15 investment banks surveyed by the Wall Street Journal predicted that the average price of Brent crude oil this year would be $53 per barrel, a decrease of $2 from the June survey; It is predicted that West Texas light crude oil will average $51 per barrel this year, a decrease of $1 compared to the previous survey.

In this survey, the forecast for next year's oil price was also lowered, with 35 banks predicting an average Brent crude oil price of $55 per barrel next year, a decrease of $2 from the June survey; It is predicted that West Texas light crude oil will average $53 per barrel this year, a decrease of $2 from the previous survey.

Analysts believe that oil prices are particularly sensitive during seasonal changes, especially when demand for crude oil and refined oil decreases seasonally in September and October.

Usually, during the summer driving season in the United States, crude oil demand increases to provide refineries with increased crude oil processing capacity to meet the gasoline market demand. After Labor Day in September, gasoline demand in the United States decreased.

Despite a downward trend in US crude oil inventories, global oil inventories are still above historical averages, and an increase in US crude oil exports is also putting pressure on the world market.

German bank analysts said in their report that the market's expectations for inventory reduction are disappointing.

After the closing of European and American crude oil futures on Tuesday, the data released by the American Petroleum Institute showed that the crude oil inventory of the United States had decreased by 7.8 million barrels in the week ended August 4, of which the crude oil inventory of the Cushing area of the United States, which was closely watched by the market, had increased by 300000 barrels; During the same period, gasoline inventory in the United States increased by 1.5 million barrels and distillate oil inventory decreased by 200000 barrels.

Analysts generally believe that US crude oil inventories have decreased. According to a survey organized by The Wall Street Journal, as of the week ending August 4th, US crude oil inventories decreased by 2.7 million barrels, gasoline inventories decreased by 1.6 million barrels, and distillate inventories decreased by 200000 barrels.

The US Energy Information Administration will release weekly oil inventory and demand data on Wednesday at 10:30 Eastern Time and 22:30 Beijing Time.