The latest CPI report in the United States showed that inflation has regained its momentum from the previous month, and the Federal Reserve may not be able to cut interest rates soon, which dealt a blow to oil prices on Tuesday, and U.S. oil fell more than 4% intraday, continuing to refresh the low since June this year.
The month-on-month growth rate of CPI and core CPI in the United States in November expanded, with the core CPI increasing by **4% year-on-year and not further cooling, and the super core CPI rising to 3 year-on-year93%, the second acceleration of super-core inflation this year. After the release of the inflation report, the market reduced bets on how aggressively the Fed will cut interest rates next year.
Oil prices have been extremely sluggish in recent days, losing most of the trading days after OPEC+ announced the expansion of production cuts. In fact, even reports that show signs of cooling inflation in the United States, such as last week's lower-than-expected Jolts job openings data, have been interpreted by the market as a sign that the U.S. economy may not be doing well next, which could hit demand and lower oil prices.
In short, the current situation of the market is that good news is also bad news, bad news is still bad news, even if the U.S. stocks, U.S. bonds, and **market have their own performance and interpretation, **market insistence**. The Wall Street Insight ** analysis article pointed out that the market is still very confused about the future of the U.S. economy, and the signals presented by the movements of different assets diverge from each other, "someone must be mistaken." As of Tuesday**, WTI closed down 2 percent for January$71, down 380% at 68$61 barrel. Brent *** closed down 2$79, down 367% at 73$24 barrel. U.S. gasoline *** fell below the $2 mark, and NYMEX January gasoline ** closed at 1$9797 gallons.
On the same day, the U.S. Energy Information Administration (EIA) lowered its forecast for oil prices this year and next. The EIA expects Brent*** to be 82 in 2023$40 barrel, compared to $83 previously$99 barrel, projected to be 82 for Brent*** in 2024$57 barrel, previously expected at $93$24 barrel.
The EIA's expectations for gasoline** have also been lowered to varying degrees, with gasoline** expected to be 3$53 gallon, compared to $3$55 gallons, with an estimated 2024 gasoline** of 3$36 gallons, compared to the previous estimate of $3$61 gallons.
EIA expects U.S. oil production to be 12.93 million barrels per day in 2023, compared to 12.9 million barrels per day previously; U.S. oil production in 2024 is expected to be 13.11 million barrels per day, compared to 13.15 million barrels per day previously.
Rapidan Energy Group, a consultancy, believes that OPEC+ needs to be effectively managed** over the next 5 years to avoid a collapse in oil prices
OPEC+ will need to carefully rein in oil over the next five years to avoid a collapse. While global oil demand will not peak for at least the next decade, the growth rate outside of OPEC**, especially in the United States, is much higher than previously estimated. At least for the next few years, to prevent oil, it is necessary to continue unification.While OPEC+ has pledged to cut production aggressively, traders are skeptical. While OPEC+ is doing its best to cut production, the United States and Canada are producing record results. Some industry insiders believe that OPEC+ may also suddenly "pivot" next year, releasing more oil to the market, making ** plummet, and forcing oil producers other than OPEC+ to reduce production.1. Vigilance and effective OPEC+** management.