Goldman Sachs monitors the crude oil market: Oil prices break through the 100-day moving average, triggering algorithmic trading. Demand for oil will expand due to the cold winter.

On Friday, influenced by the decrease in US crude oil inventories, the international benchmark crude oil price - Brent crude oil futures price rose by over 2%, breaking through $78.5 per barrel, reaching the highest level since October. Goldman Sachs stated that the extreme cold weather in the US led to record low levels of inventories at the Cushing facility in Oklahoma since 2014. Additionally, the increase in oil prices is also attributed to concerns among commodity traders regarding the policies under US President-elect Donald Trump, including potential sanctions on Iran and potential global trade conflicts disrupting energy flows, accelerating expectations of tightening global oil supply. Goldman Sachs stated in a recent research report that last week, Brent crude oil prices rose mainly due to strong demand for heating oil supported by cold weather in the northeastern US and Europe. At the same time, the latest forecast from the OECD for oil commercial inventories shows levels have dropped to 30 million barrels lower than the same period last year. Furthermore, oil prices broke through the 100-day moving average for the first time, triggering algorithmic trading and further pushing up oil prices. Goldman Sachs expects a significant drop in temperatures in the US and Northwestern Europe to increase oil demand by 100,000 barrels per day, particularly supporting the trend in diesel prices. Since hitting a low point in early December, diesel prices have risen by over 10%. Goldman Sachs stated in the research report that last week, due to continued pressure on independent refineries in China, Petrochina's demand was further below Goldman's expectations, while current expected values for Libyan oil production have slightly increased, adding 200,000 barrels per day to Goldman's traceable net supply estimate. The current expected values for US onshore oil production in the lower 48 states and total liquid production in Canada are also 200,000 barrels per day higher than Goldman's December expectations. In the two weeks before Trump's inauguration, oil exports from sanctioned oil-producing countries remained stable, Venezuela's oil exports reached a five-year high last year, and Iran's refined oil production, as compiled by Goldman, has remained relatively stable over the past two months, but the agency now sees early signs of a possible decrease in Iranian oil exports. Goldman Sachs stated that from a price perspective, the positive aspect is that OECD oil commercial inventories have decreased by 9 million barrels, and last week emerging market crude oil inventories also significantly decreased. Due to reduced production in Russia, Kazakhstan, and Iraq, the compliance rate for OPEC+'s production cuts in December rose significantly. Additionally, Goldman Sachs stated that net managed money positions in oil increased by 59 million barrels last week, with the rise in diesel positions offsetting the normalization of gasoline positions but still remaining at a relatively low 18th percentile level. From a price perspective, the negative factors are that Goldman's current forecast for US onshore oil production in the lower 48 states is 0.2 million barrels per day higher than its December expectations because the monthly report released last week by the US Energy Information Administration (EIA) showed that US crude oil production in October generally exceeded expectations, and implied production levels from pipelines have further increased over the past two months. The Dallas Federal Reserve Bank's energy survey for the fourth quarter showed that despite the decline in crude oil prices, producers remain optimistic about capital expenditure expectations. Goldman Sachs expects that at the upcoming energy conference, there will be further insights into the expectations of major producers regarding production. In the first reading for December, Goldman Sachs' compilation showed that the current total liquid production forecast for Canada also exceeded the agency's December forecast, reaching 0.2 million barrels per day. Additionally, Argentina's oil production in November increased by 12% year-on-year, reaching a new high in 22 years.