South Korea’s SK Energy withdraws from the Middle East and first buys US crude oil
1/22/2021

South Korea’s SK Energy withdraws from the Middle East and first buys US crude oil

By Crude oil market dynamics

On September, the crude oil trading cycle shifted to January, and the market sentiment for crude oil trading in the Middle East chaSouth Korea’s SK Energy withdraws from the Middle East and first buys US crude oilnged sharply. Asian buyers expect that from this month, the supply of medium and heavy sour crude oil will be tightened, when US sanctions are expected to at least partially curb Iran's crude oil delivery to Asia.

Trump’s midnight cock for crude oil has not yet seen a clear market reaction. But OPEC cannot ignore the attitude of the United States, the world's largest crude oil producer, towards oil prices. The last time Trump accused OPEC of artificially raising oil prices, it didn't take long for the market's attitude to the production reduction agreement to change from being a minor problem to a possible termination.

Shale oil wells can be dug out in a few weeks at a cost of only US$10 million, with low investment and quick results. What's more, drilling in the United States can easily get home for reunion, health and safety, so why not do it? Therefore, until oil prices remain high for a long time, offshore oil wells will basically not add new recruits. This also means that the bulls may be able to open positions in advance.

However, with the sudden emergence of the shale oil industry, the US petroleum industry has ushered in a bright moment. On September 28, the U.S. Energy Information Administration issued a monthly report stating that U.S. crude oil production increased by 290,000 barrels per day in July, reaching a record high of 0.94 million barrels.

In terms of boosting the U.S. economy, based on previous experience, a sustained increase in oil prices by $0 will reduce U.S. gross domestic product by about 0.% in the second year. Mark Zandi, Chief Economist, Moody's Analytics

BP said in its latest annual statistical report that global oil demand South Korea’s SK Energy withdraws from the Middle East and first buys US crude oilincreased by 700,000 barrels per day last year, an increase of 8% compared to 206, keeping the demand for the past five years at the same level as the last commodity super cycle in 2006-7. The highest level since the peak of super-cycle.