On December 18, international oil prices rose nearly 1% in early trading in Asia.。WTI crude up 0 as of press time.62%, trading at 72.$56 a barrel; Brent up 0.58%, traded at 77.48 USD / barrel。

Russia unexpectedly announces production cuts Four international shipping suspended in the Red Sea

On the news front, Russia announced on Sunday that it expects the country's oil exports to be further cut by about 50,000 bpd this December.。Russian Prime Minister Alexander Novak said the country will further cut production on top of the 300,000 bpd cut already set for this year.。

Novak said: "We have already increased the number of production cuts in December.。After the December supply and demand data, we have cut exports by an additional 50,000 bpd and even more。He also said that the country's oil exports in 2023 would be lower than the government's previous estimate of 2 percent due to the country's fulfillment of OPEC + production cut commitments..4.7 billion tons。

Whether it is from the time node or the intensity of production cuts, Russia's actions this time have exceeded market expectations.。Overlapping the previous sharp drop in Moscow's crude exports due to weather problems and planned overhauls, international oil prices rose in early Asian trading on Monday。

Separately, four international shipping companies, including MSC, the world's largest container shipping company, have announced on December 16 that they will suspend navigation in the Red Sea as Houthi militants in Yemen have stepped up attacks on Red Sea merchant ships.。

Analysts pointed out that since the outbreak of the new Palestinian-Israeli conflict, the Houthis have frequently launched missile and drone attacks against Israel on the grounds of "support for Palestine" and have continuously attacked "Israeli-related" ships in the Red Sea.。Tensions in Red Sea waters mean increased risk of spillover from the Israeli-Palestinian conflict, which has affected international shipping。

Geographically, the Red Sea is located between northeastern Africa and the Arabian Peninsula, with its northwest connected to the Mediterranean Sea by the Suez Canal and its south connected to the Gulf of Aden by the Strait of Mandeb.。East-West trade, especially oil trade, uses the Suez Canal to save time and expense in bypassing Africa。Historically, the Suez Canal has been interrupted several times, resulting in longer distances and pushing up freight rates.。

International oil prices end week of continuous decline

As the Fed continued to pause rate hikes last week, the market has sprouted hopes of an end to the rate hike cycle。Spurred by this sentiment, both WTI crude and Brent crude ended their longest weekly streak of declines in half a century last week, recording modest gains last week.。

The IG said that analysts considered it equally important that last week's dovish Fed meeting removed the tail risk of a hard landing for the U.S. economy and future crude demand, not to mention the technical support for crude oil to recover to the $76 / 78 region.。The CMC also said in a note that a weaker dollar and stronger-than-expected U.S. inventory data also supported crude, as a weaker dollar makes dollar-denominated crude cheaper for foreign buyers.。

Analysts also said crude inventories in Cushing, Oklahoma, the largest U.S. oil storage center, rebounded last month after approaching operating lows, due to a recent increase in storage prices at the hub.。As a result, recent Texas Permian Basin and Canadian crude flows have increased, and the continued influx has pushed stocks in Cushing higher for eight weeks to 30.8 million barrels.。

Looking ahead to the market, Haitong Futures said in a crude oil daily that oil prices were facing a similar situation as in mid-June of the year.。On the one hand, oil prices are low and weak under the suppression of bad sentiment, on the other hand, OPEC + new production cuts are about to enter the implementation period。So investors are also generally concerned about whether oil prices will once again stage a sharp rebound after July this year.？It looks like history will repeat itself, but it won't simply repeat itself.。

First of all, according to the assessment of most institutions in the market in the first quarter of next year, the effect of this production cut will not be as effective as the third quarter of the 2 million barrels per day supply gap, optimistic expectations that the premise of voluntary production cuts in place will bring a small supply gap, and the commitment of the core member states can fully implement the production cuts is still unknown.。In addition, whether the demand side will bring strong performance is also to be seen at present.。