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CCTV Script 11/10/18

— This is the script of CNBC's news report for China's CCTV on October 11, 2018, Thursday. 

We know that hurricane landing on Mexico Gulf boosts international oil prices in short-term every time as nearly 50% refining capacity and 20% crude oil production of the U.S. are located on gulf coast, so some oil companies will shut down production platform and close refining plants when the hurricane is approaching. That is a direct influence to petroleum market brought by the hurricane.

But the ruinous natural disasters, such as hurricane Michael, harming oil-producing, oil refining and natural gas is obvious. Not long ago, a report published by the U.S. Security and Environmental Enforcement Administration shows 39.5% oil-producing and 28.4% natural gas related business have closed before hurricane Michael landing on gulf coast.

Therefore, we can see from the trades in last several days that the upcoming hurricane is one of the motivating factors to oil prices as it affects supply, while the oil prices lost overnight after the hurricane landing.

Among that, WTI jumped 2.39% and Brent was off 2.25%.

Analyst said this is a "buy news, sell facts" reaction in the market. That is to say, before hurricane Michael coming, traders had priced its influence, fueling oil prices, but when the hurricane landed, the market thought its influence to local energy infrastructure is less than the estimation. Meanwhile, stateside stock dived; causing risk sentiment ramps up and that drove oil prices down, hitting the lowest closing price in 2 weeks. Additionally, the market puts a close eye on global economic activities and inventory data.

IMF declared it will cut its global economic growth forecast to 3.7% recently, and that is the 1st IMF downgrade the growth forecast in 2 years, meaning less petroleum demand. At the same time, crude oil inventory till Oct 5 soars, high above the expectation, according to data released by API.

After this news announced, the price of WTI crude oil future declined further. We will keep an eye on the following trend of oil price.