On July 6, international oil prices fell sharply. The settlement price of the main contract in the US WTI crude oil futures market was 73.37 US dollars / barrel, down 1.79 US dollars or 2.4%. The settlement price of the main contract in the Brent crude oil futures market was 74.53 US dollars / barrel, down 1.64 us dollars or 2.2%. Oil prices rose sharply on Monday after the organization of Petroleum Exporting Countries and its allies (OPEC +) called off the meeting because they could not reach an agreement on increasing supply. However, it turned lower on Tuesday, mainly because the market was worried that some OPEC member countries would increase production; Driven by high oil prices, the US shale oil supply is expected to increase.

This round of OPEC ministerial meeting is full of twists and turns. Since July 1, i.e. last Thursday, the meeting began to negotiate, because UAE opposes a new production increase agreement (400000 B / D per month from August to December this year, and 2 million B / D by the end of this year), the meeting has been postponed to last Friday, but the meeting still has no result; Until the meeting reopened on Monday, the UAE was always opposed to the latest production increase agreement. The meeting was forced to stop and oil prices continued to rise. On Monday, the settlement price of Brent crude oil rose to US $77.16/barrel, up US $0.99 or 1.3%.

However, the wind direction of the market changed suddenly on Tuesday, and the OPEC meeting failed to reach an agreement again and again, which made the market lose confidence in the future direction of OPEC. Even if the future policies were reluctantly implemented, the market also had doubts about the implementation of the member states’ production control policies. If the UAE increases production, other member states may follow suit, which will make OPEC’s effect of balancing oil supply in the oil market fail.

In addition, the oil price is at a high level, the market shows more concern about the increase of shale oil production in the United States, the U.S. economy continues to pick up, the inventory data keeps falling, and the market expects that the U.S. shale oil producers will continue to increase supply. Due to the comfortable price, the U.S. production has returned to about 11 million B / D, but compared with the production of about 13 million B / D in 2019, the U, There is still a lot of room for improvement.

In the future, the business community believes that short-term oil prices are intertwined. Although the global economy is still in the process of recovery, there are more risks in the supply side. Therefore, there is a great deal of uncertainty in the oil market. Guided by the news, the short-term oil market may continue to fluctuate and widen its amplitude. In the medium term, it is generally expected that the oil price will continue to challenge the $80 level.