Cushing crude oil is going to bottom! Oil prices rose for the ninth consecutive week!

U.
S.
crude rose 1.
6 percent to $83.
98 a barrel this week, the ninth straight week of gains
.
With the outbreak of the European energy crisis, OPEC+'s refusal to increase production further and power plant fuel switching, inventories in the largest crude oil inventory center in the United States are rapidly bottoming, which has pushed oil prices further to a seven-year high
.
At the same time, the correction in commodity prices and the resurgence of the European pandemic could weigh on oil prices
.

Inventories at the largest U.
S.
crude oil storage center fell to levels they were last seen when oil prices hit $100

Inventories at the largest U.
S.
crude oil warehouse are rapidly approaching critical levels
the last time oil prices exceeded $100 a barrel.

Storage tanks in Cushing, Oklahoma, require a minimum amount of oil to maintain normal operations, a level that traders generally believe is around 20 million barrels
.
Unusually, inventories have fallen by more than 4 million barrels to 31 million barrels in the past two weeks and are expected to continue to decline
rapidly due to unlimited global demand for U.
S.
light sweet crude.

Traders at some of the world's largest oilmen said inventories could fall further to lows in the coming weeks, prompting a more bullish
turn.

"Cushing's energy storage drought alone may justify a rise in crude oil prices to new levels," said Bob Yawger, head of U.
S.
futures at Mizuho Securities, "Regardless of OPEC+ production increases or a weak dollar, if Cushing continues to decline, oil prices could soon spiral out of control
.
" ”

Cushing's rapid depletion signals a tight global oil supply and could push oil prices further higher
from current levels.
Soaring oil prices are already driving up the cost of road fuel, freight and air transport, and leading to higher inflation, while many countries are just recovering from a pandemic-driven economic downturn
.

A senior trader at one of the largest U.
S.
crude exporters said demand for Cushing was soaring because it was the cheapest crude in the world and inventories were falling quickly
.
Demand for U.
S.
crude is higher than ever, noting that South Korea's November crude purchases will hit an all-time high
, the person added.

Asian buyers, including India and Taiwan, remain on the market and will load U.
S.
crude in early November, underscoring enthusiasm for sourcing
, traders said.

The global energy crisis has prompted Asia to turn to the United States for oil

Asian demand for U.
S.
oil is rising as the energy crisis boosts other crude prices
priced in global Brent crude futures contracts.

China and other Asian buyers have been snapping up U.
S.
supertankers of sour crude for November delivery and seeking more
deliveries in December, traders said.

The increase in Asian demand for U.
S.
crude oil comes after a general recovery in road fuel and freight activity and ahead of possible more oil demand in the power sector in the winter, where global fossil fuel supply shortages are driving higher prices
.

Saudi Energy Minister Abdulaziz bin Salman recently reiterated the need for OPEC and its allies to take a gradual, phased approach to restoring output
.

John Kilduff, a partner at Again Capital LLC, said the structural tightness of supply has been the biggest driver of the market, and no one in the market really expects a significant increase in OPEC+ production
in the near future.

Elisabeth Murphy, upstream analyst for ESAI Energy LLC's North American operations, said Europe and Asia will increase demand
by about 700,000 barrels per day this winter as fuels switch from natural gas to oil.

Given that the U.
S.
is also about to face a cold winter, increased overseas demand will mean more competition
for U.
S.
refineries.
In addition, Hurricane Ida has already caused a loss of 30 million barrels of local supply, and some production will not recover
until next year.

The European energy crisis is expected to be difficult to resolve in the short term

Central Bank of Russia Governor Nabiullina said on Friday that inflationary pressures came from rising
global gas prices.
US President Joe Biden has also previously mentioned that the high price of natural gas is because OPEC refuses to supply
.

In this situation, Europe urgently needs Russian gas to help defuse the energy crisis
.

As JPMorgan points out: Without additional supplies from Russia, the winter premium currently included in European gas prices is unlikely to be significantly reduced until the weather outlook becomes more certain in January
.

According to RIA Novosti, on the 22nd local time, Russian President Putin said when attending the "Valdai" forum meeting that the second branch of the "Nord Stream-2" natural gas pipeline may complete gas injection in mid-December 2021
.
If the license for the Nord Stream 2 gas pipeline is successfully processed in Germany, Russia will immediately be able to send gas
to Europe through the pipeline.

The first line of the Nord Stream-2 gas pipeline completed technical gas
injection on October 18.
The Nord Stream 2 natural gas pipeline project has two branch lines, starting from Russia and ending in Germany, with an annual transmission capacity of 55 billion cubic meters, and Putin estimates that the current natural gas gap in Europe is 70 billion cubic meters
.

At present, the license for the "Nord Stream-2" natural gas pipeline is being processed
.
The license application is divided into two parts, first a draft decision will be prepared by the German regulator, and then it will be evaluated by the European Commission
.
The entire process, as required by the relevant laws
, can take several months.
The German regulator received the full set of documents
required for the application in September.

Russia may not send gas to energy-starved areas of Europe unless European regulators first approve its Nord Stream 2 gas pipeline
, people familiar with the matter said.

This could mean that Europe's energy crisis could continue until the license application is successful
.

The general shortage of natural gas and coal is forcing the power industry to increasingly switch to oil
.

The market expects oil prices to rise

Jay Hatfield, CEO of Infrastructure Capital Advisors, said: "With the epidemic peaking and the United States opening up vaccinated travelers to entry, crude oil rally continued for nearly 30%
for three months.
We expect this rally to continue as we head into November, where colder weather will spur more demand for heating oil and the holiday season will drive up gasoline demand
.

Infrastructure Capital Advisors expects oil to trade in the $80 to $100 range in 2022, citing increased demand related to international travel, increased demand from fuel conversion, and the equivalent of $180 per barrel of oil
after global gas trading prices.

Marshall Steeves, energy market analyst at IHS Markit, said global oil inventories remained tight as demand growth remained solid but production growth lagged
.
OPEC+ insisted on increasing production by 400,000 b/d a month, while U.
S.
production actually fell last week and the post-pandemic production recovery was slow
.

Sevens Report Research said on Friday that energy commodities are unlikely to rise every day, and we can expect the sector to remain volatile
.
But at the end of the day, supply remains limited and demand is strong, and if the weather moves early into winter and starts to get cold, it's time to be prepared for higher energy commodity prices
.

Mitsubishi UFJ said in its Oil Market Weekly last week that $80 could just be the bottom
of oil prices because of the energy crisis.

In its latest Commodity Markets Outlook on Thursday, the World Bank predicted that energy prices are expected to continue to rise
modestly in 2022, following a surge of more than 80 percent in 2021.