CCTV Script 04/10/18

— This is the script of CNBC's news report for China's CCTV on October 4, 2018, Thursday.

Some mixed news exists in petroleum market, causing oil prices experience turbulence. On the shorted oil prices, first, OPEC's stance removed the possibility of increasing production immediately on Algiers conference though; Russia and Saudi are increasing supplies to markets secretly, according to Reuter's report, adding that those 2 sides had reached deal before the meeting last month, and had told the U.S. their plan of cranking up oil output. Behind raising outputs, whatever the motivation is White House's pressure, we do see that Trump is taking a harder stance to Saudi.

Trump delivered a public speech on a rally not long before; warning Saudi severely, implying the U.S. may take back its military protection to Saudi, and claiming the current Saudi regime would fall within two weeks

DONALD TRUMP

I said King we are protecting you. You might not be there for two weeks without us. You have to pay for your military.

Saudi energy minister Falih and Russian President Putin both responded to the news.

Falih admitted Saudi's oil outputs in Nov will be slightly greater than that in Oct, but he asserted the oil price is determined by market. At the same time, he said outright that Saudi does communicate with the Russia weekly, but their target is to balance the oil market. On the Russia front, it's correct to complain the high global oil price, but overpriced oil should be down to Trump himself, as well as US sanctions against Iran and Venezuela, what's more, Syria's current situation, also fueling oil prices.

So the different stances and voices in the market do make people confused, no matter whether Saudi and Russia's actions jibe with their words, this kind of news drew the ire from Iran. Iran said, Saudi and Russia have each increased 346,000 and 250,000 barrels per day, and that violated OPEC's deal. While in fact, fundamentals of bullish oil prices are strong now, as once the U.S. implements sanctions against Iran in Nov officially, then oil market will be in short supply. What we hear from the traders is under the pressure from supply side, Saudi and Russia increase outputs will not bring a big change to oil prices, but Saudi have to take more aggressive measures, then it can crack down on prices. And that's why the market didn't react much to the news of the increase and we saw traders' confidence in fundamentals driving overnight oil prices higher again.

Among them, U.S. WTI light crude for November rose 1.6 percent to a fresh four-year high, while international Brent crude for December jumped 1.76 percent but was limited by the strong dollar and news of U.S. inventories.

U.S. crude oil inventories rose by 8 million barrels last week, four times higher than analysts' expectations, and is the largest increase since last March, the EIA said on Wednesday. As a result, the market has shorted and bullish news, it is sure that, before the US take sanctions on Iran oil exports; this incident is a strong support to oil prices.