Oil prices fell to the lowest in two weeks on Thursday. China announced that it would organize a national reserve of crude oil. The US crude oil inventories fell less than expected last week, and US debt rose as investors sought safer assets.

The China Grain and Material Reserve Bureau said on Thursday that for the first time, it will organize the release of national reserve crude oil in phases and batches in a rotating manner to ease the pressure of rising raw material prices for production-oriented enterprises. UBS Commodity Analyst Giovanni Staunovo said, "The extra supply from the reserves of major consumer countries reduces the need to import more oil in the short term, thereby putting pressure on oil prices."

EIA data shows that as of the week of September 3, crude oil inventories fell by 1.528 million barrels, refined oil inventories fell by 3.141 million barrels, the largest decline since the week of April 23, 2021, and gasoline inventories fell by 7.215 million barrels, a decline recorded. It will be the biggest since the week of March 5, 2021. Last week’s total crude oil production fell by 1.5 million barrels per day to 10 million barrels per day, the lowest since the week of February 19, 2021.

Analyst Sheela Tobben commented on EIA crude oil inventory data. The hurricane also led to a 1.5 million barrels per day reduction in domestic crude oil production in the United States last week, the largest drop in records. Even now-more than 10 days after Hurricane Ida made landfall, only 20% of the damaged crude oil production has recovered. The current domestic crude oil production in the United States is the lowest level since the winter storm in Texas.

After the U.S. bid for $24 billion in 30-year Treasury bonds, oil prices fell again by more than $1. This round of bidding received strong demand, and the winning interest rate was as low as 1.91%, causing investors to sell high-risk assets such as oil and stocks. John Kilduff, a partner at Again Capital LLC, said, "The 30-year U.S. Treasury auction performance is amazing, and the winning interest rate is the lowest since January. This has caused severe panic in the oil market and it looks like funds are flooding into safe-haven assets."

In general, although the EIA crude oil inventory data has decreased, it is far below expectations. The boost to oil prices is limited. Under the influence of the oil reserves of major Asian countries and the worries about economic recovery, investors have dumped crude oil to seek safe assets, making oil prices once again. The decline in oil prices has increased due to multiple factors. As the weekend approaches, pay attention to news about the hurricane and news about Iran’s nuclear negotiations.

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