Oil prices rise first and then fall! OPEC+ is pitted against the White House, and the United States may use crude oil inventories to drive down oil prices

After a brief meeting on Thursday (November 5), OPEC+ approved a 400,000 b/d increase in December production, keeping the planned increase unchanged and ignoring US President Joe Biden's request
to accelerate production increases.
Some major oil consumers believe the pace is too slow to sustain the post-pandemic economic recovery
.

As there is growing speculation that the United States may use emergency crude oil inventories to push down oil prices, the next thing may be OPEC+ and the White House "showdown"
.

(OPEC+ Conference Statement)

OPEC+ "leading big brothers" Saudi and Russian energy officials have publicly responded to why they ignore the call of the United States
.

Saudi Energy Minister Abdulaziz said it was the right thing to do to gradually increase oil production and while seeing demand growth, he remained worried about the market
.
In addition to defending the decision of the alliance of oil-producing countries, he gave insights
into the causes of the supply and price crisis in energy-consuming countries.

Abdel-Aziz said the root causes of the energy problem may be answered in the 1979 G7 summit declaration in Tokyo, when the countries pledged to take action to drastically reduce crude oil use
.
He pointed out that the peak increase of Brent crude oil since March this year is only 36%, while natural gas and coal have at least doubled, saying that the main cause of inflation problems is not crude oil
.
Saudi oil production exceeded 10 million b/d
for the first time since the outbreak of the pandemic, according to Arab State TV.

Russian Deputy Prime Minister Alexander Novak said plans to increase production by 400,000 b/d remained in place, monthly meetings would allow OPEC+ to react to market changes, and OPEC+ had enough tools to respond to a sharp recovery
in demand.
He expects oil demand to recover, but there could be a seasonal decline in the fourth quarter of this year to the first quarter of next year, and global demand could recover by 5 million to 6 million b/d
this year.

UAE oil ministers and Kuwaiti oil ministers also said that there will be an oil surplus
in 2022.
OPEC+ expects an oil surplus in the first quarter of next year, and a 400,000 b/d production increase will smooth OPEC+ into the first quarter, with OPEC+ aiming to maintain market balance, not specific prices
, Emirates oil chiefs said.

The White House on Thursday criticized major oil producers' decisions to keep oil production stable, saying OPEC and its allies seemed "unwilling" to use their power to help the global economy recover.

A spokesman for the White House National Security Council said:

"We believe that the global recovery should not be threatened
by an imbalance between supply and demand.
At a critical time in the global economic recovery, OPEC+ seems reluctant to use its existing capacity and strength
.
”

The spokesman said the Biden administration will consider using its comprehensive tools to strengthen the resilience
of energy markets.

Goldman Sachs warned that OPEC+ and the United States over crude oil production will exacerbate oil price volatility
.

Goldman Sachs said that the global oil market is still undersupplied, and OPEC+ is publicly arguing with the United States over crude oil production, and oil price volatility is expected to intensify
in the coming weeks.
Goldman Sachs analyst Damien Courvalin and others wrote in a note Thursday:

"Overall, we maintain our bullish view, oil shortages remain unresolved, current high oil demand still constitutes a near-term positive, and increasingly structured supply shortages mean long-term oil prices will be much
higher.
"

Goldman Sachs believes that if the United States releases strategic reserves, it may only temporarily ease the pressure on prices, and it may even backfire
next year.
The possibility of increased crude oil supply from the United States and the possible resumption of nuclear negotiations by Iran are also factors
that have affected oil price volatility in the near future.

A new round of implementation negotiations on the JCPOA will resume at the end of this month, and if a deal is finally reached, the market expects a one-time increase of
1.
5 million barrels per day.

UBS strategist Giovanni Staunovo also said in the report that the market remains undersupplied after OPEC+ decided to maintain a cautious pace of production increases, and continues to expect Brent crude prices to reach $90/barrel
in the coming months.

The UBS report said OPEC+'s decision could prompt the U.
S.
to release strategic crude reserves, but such a move "would only fill the gap caused by temporary production disruptions and would not address structural issues such as underinvestment and rising demand," and therefore continued to recommend investors with higher risk tolerance to add to longer-term Brent futures contracts, which are currently trading below the spot price
.

The crude oil futures market showed an "inverted V" trend on Thursday, with oil prices extending short-term gains after OPEC+ announced that it would stick to its plan to increase production by 400,000 b/d in December, with WTI and crude oil regaining $83 and $84 respectively
.
However, after the US National Security Council reiterated that it would consider comprehensive measures in the energy sector, international oil prices turned lower and turned lower during the day, indicating that crude oil bulls took advantage of the good to close their positions, and the strength of the US dollar also put pressure
on the overall commodity market.

Scheduled