Oil prices retreated 6 percent this week as concerns about the warming of the epidemic in Europe and the release of crude oil reserves in the United States weighed on oil prices

On Saturday (November 20), U.
S
.
oil prices fell from their highs this week.
Among them, the price of US crude oil fell by $5.
01 this week, or 6.
21%; Brent crude oil prices fell $3.
29, or 4.
01%,
for the week.

Oil prices retreated this week, mainly under pressure from several factors
.
The first is a new wave of the epidemic, which has led to the worsening of the epidemic in Europe putting pressure on oil prices, followed by the rise of the US dollar caused by the Fed's interest rate hike expectations, and the pressure on oil prices in US dollars has fallen, and then the market has caused market concerns about the release of crude oil reserves by the United States and several crude oil consuming countries, and finally international organizations such as IEA and OPEC believe that the situation of excess supply of crude oil may also be unfavorable to oil prices
.

However, although oil prices closed down this week, oil prices are still supported by many factors, such as OPEC will not increase production further, gratitude holiday demand, etc.
, so many organizations are still optimistic about the future prospects of crude oil, and even believe that the price of U.
S.
oil will rise to $
100.

A new wave of the epidemic has struck, and the worsening epidemic in Europe has put pressure on oil prices

Recently, the coronavirus epidemic in Europe has continued to worsen
.
The number of new confirmed cases reported by some countries on the 18th hit a new high
since the epidemic.
According to the global weekly report on the new crown epidemic released by the World Health Organization on the 16th, there were 230 new confirmed cases per 100,000 people in 7 days in the past week, the highest
in the world.
In the face of a new wave of the epidemic, many European countries have tightened epidemic prevention measures and promoted vaccination.

Experts believe that Europe has recently become the "epicenter" of the global epidemic, which is related to
factors such as the onset of winter, premature unlocking, and insufficient vaccination.
Many European countries have recently tightened epidemic prevention measures and accelerated vaccination to control the rebound
of the epidemic.

German CDC Robert? According to data released by the Koch Institute on the 18th, the number of daily confirmed cases in Germany exceeded 65,000 for the first time; 336.
9 new confirmed cases per 100,000 people in 7 days, also a record high
.

The Austrian Ministry of Health reported 15,145 new confirmed cases on the 18th, the largest single-day increase since the epidemic; The cumulative number of confirmed cases also exceeded the million mark, increasing to 1011465.

On 18 November, the UK reported more than 46,000 new confirmed cases and France reported more than 20,000 new confirmed cases
.

The number of new confirmed cases in Poland, Hungary, Slovenia, Croatia, Greece, the Netherlands, Ireland and other countries has also reached new highs in recent days, and the medical systems of many countries are under heavy pressure
.

The epidemic in Europe has rebounded
rapidly.
Many experts believe that the increase in indoor activities in winter is one of the reasons, but the premature relaxation of epidemic prevention restrictions and the need to improve vaccination rates are particularly worthy of attention
.

Robert? Director of the Koch Institute, Lothar? Weller pointed out on the 17th that Germany is currently "opening up too many fields too fast"
.
In his opinion, clubs and bars, etc.
must be closed, large events should be canceled, and epidemic prevention rules should be strictly enforced, and some public areas should only be allowed to vaccinated people and those who have recovered from the new crown
.

Paul Son, Chief Executive Officer of the Irish Health Service? Red said on the 18th that after the country lifted most of the epidemic prevention restrictions last month, the number of confirmed cases, hospitalized cases and severe cases increased significantly, bringing great pressure
to the national medical system.

Experts from many countries have stressed the importance of
vaccination.
Robert? The Koch Institute recently warned that without a significant increase in vaccination rates based on population size, the current round of the epidemic in Germany will be far more severe than it used to be
.
According to data from the institute on the 18th, 67.
8% of the people in Germany have completed the full vaccination
.

Julian, a virologist at the University of Leicester? Don also pointed out the importance of
vaccination.
"The Delta strain can easily bypass natural immunity and vaccine immunity and cause more symptomatic and severe infections
in unvaccinated people," he said.

OPEC expects the global oil market to experience a glut as soon as next month

The Organization of the Petroleum Exporting Countries (OPEC) said that as the post-pandemic economic recovery stalls, the global oil market will go from undersupply to oversupply as soon as next month
.

OPEC Secretary-General Mohammad Barkindo said the outlook meant it was reasonable
for OPEC to increase production at only a modest pace.
The comments again show that OPEC and its partners will continue to resist U.
S.
pressure to accelerate production increases and will stick to earlier tactics
at their meeting early next month.

Barkindo told reporters in Abu Dhabi on Tuesday that the recovery is fragile and these uncertainties further strengthen our resolve
to hold the wheel firmly.

Barkindo said OPEC and its allies — the 23-nation alliance led by Saudi Arabia and Russia — would be very cautious
about increasing production.
He echoed Saudi Energy Minister Abdulaziz bin Salman, who said this week that oil inventories would pick up
again starting next month.

Barkindo said we've seen inventory recovery for six weeks in a row, and our decisions are data-driven and we have to be very cautious
.

The IEA believes that the oil price rally is coming to an end as production picks up

The International Energy Agency (IEA) said tensions in the global oil market, which pushed oil prices to seven-year highs, have begun to ease
as production picks up in places like the United States.

According to the IEA's monthly report, demand growth remains strong, but supply is catching up, and changes in oil inventories in October suggest "trends may be shifting.
"
If this prediction is correct, it will bring great comfort
to consumers who have been hit hard by rising prices.

The IEA said in its monthly report that the world oil market remains tight by all measures, but a moderation of price increases may already be in sight, and U.
S.
production is increasing
along with higher oil prices.

Global refineries will process 80 million barrels per day of crude oil this month, up nearly 3 percent from October and well above quarterly averages
in the first three quarters of the year, according to the Paris-based advisory firm for energy-consuming countries.
Next month, another 800,000 barrels
per day will be processed.

To some extent, refinery equipment maintenance ends at this time of year, so an increase in crude oil processing is expected
.
However, data from the International Energy Agency shows that refined product inventories are expected to decline
this quarter, despite increased crude oil processing.
This suggests that the supply and demand situation will not deteriorate
significantly in the short term.

The IEA is likely to look longer to support its pricing view
.
Brent crude futures are currently the January contract, and the largest position in West Texas Intermediate (WTI) is also the January contract
.
Several agencies, including the International Energy Agency, expect oil production to begin to exceed demand
if OPEC+ producers increase production as planned.

Global oil production increased by 1.
4 million barrels per day last month, and will increase again
in November and December as oil supplies suspended by Hurricane Ida in the Gulf of Mexico resume.
U.
S.
shale oil drillers are also taking advantage of rising prices to boost production
.
The IEA said that as OPEC+ continues to resume exports suspended during the pandemic, these increased production will be put to market
.

Even without the deployment of the Strategic Petroleum Reserve, the United States is leading the supply rebound
.
The IEA raised its U.
S.
fourth-quarter production forecast by 300,000 barrels per day and raised its forecast for next year by 200,000 barrels
.
U.
S.
production will increase by 1.
1 million barrels per day in 2022, accounting for 60%
of production growth outside OPEC+.
The overall global supply and demand forecast for this year and next is largely unchanged
.

The market expects the release of strategic crude oil reserves by the United States, which puts pressure on the short-term trend of oil prices

Biden is facing increased pressure from party members to release oil from the Strategic Petroleum Reserve SPR to suppress rising oil prices
.

Marshall Steeves, an energy market analyst at IHS Markit, said crude oil futures sold off on market expectations that the Biden administration may consider releasing strategic crude oil reserves and the United States may ban crude oil and gasoline exports
.
Democratic U.
S.
Senate leader Schumer pushed for the release of strategic crude oil reserves
over the weekend.

Schumer said on November 14 that the Biden administration should release strategic crude oil reserves to lower gasoline prices
as the shopping season approaches.
Steve believes that the release of the Strategic Crude Oil Reserve is likely to be the most likely scenario
.
Nevertheless, since the release of strategic reserve crude oil represents only a small fraction of global production and consumption, the impact will be
short-lived.
In addition, this will be a one-time event, not a continuous increase
in production.
The push to release strategic crude oil reserves is likely to be driven by political considerations, resulting in a brief drop in prices during the shopping season
.

John Kilduff, founding partner of Again Capital, said that earlier in the day, the Biden administration's expectation that it may release strategic crude oil reserves to fight inflation weighed on oil prices, but the market's doubts about the US operation caused US crude oil futures prices to rise
.
Kilduff believes that market prices seem to have reacted too aggressively to the possibility of the United States releasing strategic crude oil reserves
.

Louise Dickson, an analyst at RystadEnergy, said the market looked less worried about the current tight supply, and traders turned to focus on the resurgence of other bearish factors, namely a possible increase in oil supply and a rebound
in the number of people infected with the new coronavirus.

If the SPR is not released, oil prices will continue to rise
.
Rebecca Babin, senior energy trader at CIBC Private Wealth Management, said that at the current point, the market has factored most of the release of crude oil reserves into the price, and over time, if the crude oil reserves are not released as expected, oil prices may rise sharply
.

As the U.
S.
considers releasing crude supplies, Saudi Arabia and the United Arab Emirates said OPEC would continue to carefully plan to increase production
.
The group is adding 400,000 barrels a month, but OPEC members have not so far reached that level
in actual production, according to the documents.

Oil prices soared to multi-year highs
as the economic recovery and the global energy crisis spurred oil demand.
OPEC and its allies are more concerned about the stability of
demand in the coming months.
The Biden administration's consideration of liberalizing crude oil reserves comes at a time when gasoline prices are at a seven-year high, which could affect Democrats
whose support is declining.

Gasoline prices in California, the nation's most populous state, hit a record high Monday
, according to the American Automobile Association.
Even Democratic senators who are concerned about climate change have urged the president to act quickly to curb oil prices
by using SPR or banning U.
S.
crude exports.