Seven consecutive yangs! Energy crisis + tight supply, bulls continue to "attack the city"

U.
S.
crude futures topped $80 a barrel for the first time since November 2014 as OPEC+ producers remain tight at a time when the global energy crisis boosts demand, and global gas shortages are already boosting oil demand for power and heating, Saudi Aramco said.
The U.
S
.
Department of Energy said that there are currently no plans to use oil reserves, which provide upward momentum for oil prices.
In addition, overall positive U.
S.
economic data this week and improved international conditions further boosted the demand outlook
.

U.
S.
crude rose 5.
0% this week for the seventh consecutive week last week, hitting an intraday high of $80.
11 / barrel to close at $79.
59 / barrel; Brent crude rose 4.
22% this week, hitting an intraday high of $83.
47 a barrel, the highest since October 2018, and closed at $82.
58 a barrel
.

OPEC+ maintained its plan to increase production by 400,000 b/d per month unchanged

In a brief video conference on Monday, ministers approved plans to increase production by 400,000 barrels per day in November, rather than the larger increase previously speculated
, according to the OPEC+ statement.
This gives oil prices upward momentum
.

Analysts said they expect uncertainty about the impact of the coronavirus variant on demand and the possibility of causing new disruption to the economy, putting pressure
on OPEC+ decision-making.

Saudi Arabia's oil production is now close to pre-pandemic levels, oil revenues are the highest since 2018, and other member states are largely in line with a monthly plan
to gradually restore spare capacity.
According to unnamed U.
S.
officials, Washington is also satisfied
with the current pace of production increases.

Amrita Sen, chief oil analyst and co-founder of consultancy Energy Aspects, said that means Saudi Arabia wants to change its monthly production increase plan "as little as possible.
"
According to the statement, OPEC+ members will hold another production meeting
on November 4.

Damien Courvalin, head of energy research at Goldman Sachs, said there will be 650,000 barrels per day of additional oil demand later this year, driven by the energy consumption switch, with oil prices reaching their highest level in seven years
.
Inventories are about to fall to 10-year lows, setting the stage
for another significant rally.

The improved economic outlook boosted demand expectations

This week's economic data is relatively optimistic, the WTO raised global economic forecasts this year and next, and the risk of U.
S.
bond defaults temporarily eased, which improved crude oil demand expectations and provided upward momentum for oil prices
.

The ISM non-manufacturing activity index edged up to 61.
9
in September from 61.
7 in August.
A reading above 50 indicates an expansion
in the services sector, which accounts for more than two-thirds of U.
S.
economic activity.
Economists had predicted that the index was expected to fall to 60
in September.

Private jobs in the U.
S.
grew more than expected in September, with restaurants and other high-touch businesses ramping up hiring
as coronavirus infections began to fall.
ADP's national jobs report showed that private jobs rose by 568,000 last month, higher than analysts had expected to increase by 428,000
.

U.
S.
jobless claims fell by the most in three months last week, suggesting that the labor market recovery is returning momentum after a recent slowdown as the wave of the virus begins to subside
.
Initial jobless claims fell by 38,000 to 326,000 on a seasonally adjusted basis in the week ended Oct.
2, the biggest drop since late June
.

The U.
S.
Senate on Thursday passed a bill to raise the debt ceiling in the short term, putting the U.
S.
on the brink of near-default on record, breaking the weeks-long stalemate that has plagued financial markets and easing market concerns
.

"Everyone, including me, breathed a sigh of relief because we were able to reach an agreement that would allow us to reach an agreement by Dec.
3, but we do need to address this from a long-term perspective," Yellen said
in an interview Thursday afternoon.
"So we have more work to do to get through this after December 3
.
"

The international situation has improved

In addition, the improvement in international relations further provides confidence to crude oil bulls, because it means that the global economic outlook is further improved, and crude oil demand is expected to increase
further.

On October 8, Foreign Ministry spokesman Zhao Lijian said that in accordance with the spirit of the September 10 telephone call between the two heads of state, Yang Jiechi, member of the Political Bureau of the CPC Central Committee and director of the Office of the Central Foreign Affairs Commission, and Sullivan, the US president's national security adviser, held a meeting
in Zurich, Switzerland.
The two sides had a comprehensive, frank and in-depth exchange of views
on China-US relations and international and regional issues of common concern.
During the phone call, the two heads of state agreed to continue to maintain regular contact
through a variety of means.
In order to implement the consensus reached by the two heads of state, Yang Jiechi and Sullivan discussed
the holding of a video meeting between the two heads of state before the end of the year.

On the morning of October 9, Liu He, member of the Political Bureau of the CPC Central Committee, vice premier of the State Council, and leader of the Chinese side of the China-US Comprehensive Economic Dialogue, held a video call
with US Trade Representative Dai Qi.
The two sides had pragmatic, frank and constructive exchanges and discussed three issues: First, Sino-US economic and trade relations are very important to both countries and the world, and bilateral economic and trade exchanges and cooperation
should be strengthened.
Second, the two sides exchanged views
on the implementation of the Sino-US economic and trade agreement.
Third, the two sides expressed their core concerns and agreed to resolve each other's legitimate concerns
through consultations.
The Chinese side made representations on the lifting of tariffs and sanctions, and clarified its position
on China's economic development model and industrial policy.
The two sides agreed to continue communication in an attitude of equality and mutual respect to create favorable conditions
for the healthy development of economic and trade relations between the two countries and the recovery of the world economy.

The WTO raised its global trade growth forecasts for 2021 and 2022 to 10.
8% and 4.
7%, respectively, citing the recovery
in economic activity in the first half of this year.

WTO Director-General Okonjo Iweara said that if it can meet the 2021 forecast, it will be the largest year-on-year growth rate since 2010
.
"Trade is a key tool in the fight against the pandemic, and this strong growth underscores the important role
trade will play in the global economic recovery.
"

Edward Moya, senior market analyst at OANDA, said there were many incentives to keep the oil market tight, with fuel demand showing signs of improvement as economic activity rebounded and pandemic restrictions eased, and fears of tighter gas supplies during the cold winter
.

Moya said the market is highly expecting "that the large gap between supply and demand will not change
in the foreseeable future.
" ”

European gas prices hit records, and a number of British energy companies went out of business

This week's global gas supply shortages have pushed natural gas prices to new record highs and provided momentum for oil prices, as soaring natural gas prices in Europe have prompted power generators to switch to oil to generate electricity, boosting demand for crude oil for power generation this winter
.

European natural gas rose more than 60% this week for two days to a record high; UK gas prices reached 400p/sam, a record high for wholesale gas prices, and US gas futures prices also hit a twelve-year high
this week.
Industry sources pointed to high demand for natural gas and reduced supply as the reason for
the surge in wholesale prices.

Analysts say soaring natural gas prices and the extent to which fuels are switching from natural gas to oil will be key factors
to watch now.

John Kilduff, a partner at Again Capital in New York, said, "The fundamental backdrop is tight supply, which will continue to drive oil prices steadily higher,"

The energy market has tightened in the face of improved fuel demand, and many fear that the cold winter could strain gas supplies further
.

Industry insiders are calling on the government to help businesses and industries stay afloat
.
Britain's energy-intensive user group, which represents steel, chemical and fertiliser companies, said soaring costs had caused steel production to stop
"at peak demand".
High wholesale gas prices have led to the closure of several UK energy companies and the shutdown of several industries over the past few weeks
.

BOFA GLOBAL RESEARCH SAID IT EXPECTED CONTINUED SHORTAGES
IN GLOBAL AND EUROPEAN GAS MARKETS DESPITE THE RUSSIAN PRESIDENT'S PLEDGE TO EXPAND SUPPLY.

Future Market Outlook: Pay attention to news related to US crude oil reserves

This week, there was news that the United States would use strategic crude oil reserves, but it was then denied, the relevant news is vague and uncertain, investors still need to keep an eye on
.

Commonwealth Bank of Australia (CBA) analyst Vivek Dhar said in a note that "oil prices rose after the U.
S.
Department of Energy said it did not intend to tap the U.
S.
Strategic Petroleum Reserve 'at this time' to cushion the rally.
"

However, a source at the U.
S.
Department of Energy said it was not accurate for Bloomberg reporters to post on social media that the Department of Energy is not considering the use of the Strategic Petroleum Reserve "at this time," while adding that "all tools are being considered" to deal with tight energy supplies in the market
.

Overall, the rise in oil prices this week was due to soaring natural gas prices, encouraging power generation and some industries to switch to oil, as well as the decision of the Organization of the Petroleum Exporting Countries (OPEC) and Russia-led allies (OPEC+) to stick to their plans
to increase supply by only 400,000 b/d in November.
Soaring natural gas prices and the extent to which the fuel is switched from natural gas to oil will be key factors
to watch now.

In the coming week, OPEC, EIA and IEA will all publish monthly reports on the crude oil market, which investors need to focus on
.