From 2 am on April 27, the high oil prices in the domestic and international markets plummeted. Since then, oil prices have weakened throughout the day. From the European trading period starting at 4 pm, oil prices continued to fall sharply. Both WTI and Brent markets have fallen more than $4 from their intraday highs, and a 6% drop in a single day is a collapse. By the end of the day, oil prices have fully recovered from the past week. Technically, it constitutes a typical form of roof roof. Although this week's domestic INE crude oil futures have obvious complementary actions compared with the external market, the relative resistance of the performance has declined, but it has also recovered most of the increase.
After the oil price plummeted, market investors immediately sought a reasonable explanation. Trump then revealed to reporters on Friday that he had called the Organization of Petroleum Exporting Countries (OPEC) to ask the organization to lower the price of crude oil. But the above did not say who he was on the phone. After receiving this information, oil prices continued to fall rapidly. The market generally believes that this statement is the fuse of the oil price collapse on Friday night, but the market media said in the early morning that OPEC Secretary General, Saudi Crown Prince and the Minister did not talk to him. The oil price sighed a little from the recession and fell slightly, but it still recorded the biggest one-day drop in a year.
The sharp drop in oil prices and news from the news indicate that investors are more hesitant about market expectations after the deterioration of Iranian sanctions and the expected increase in OPEC, and their mentality is not stable. In fact, starting from April 22, the United States announced that it will terminate Iran`s sanctions exemption on May 2, and oil prices will take another step. US oil prices broke through $66 a barrel. Most markets invest in oil prices after reaching $75 a barrel. Long-term expectations have been fully released. The disk shows that once the market is loose, the initiative of investors to escape long positions is very positive, profit-taking, and the conversion of long-short power has become a natural driving force for oil price decline.
Oil prices have formed a staged high pattern
If it were not for the fall on the 26th, crude oil prices would rise sharply throughout April, and all three benchmark crude oil prices showed a substantial increase. The oil price benefited from OPEC+ production cuts, the biggest increase this month.
Seasonal inflection points usually occur between May and June. Prior to this, prices generally continue to rise. This year's crude oil price trend is basically similar to seasonality, except that the absolute value is significantly higher than seasonal. This year, in addition to the seasonal support of fundamentals, the fundamental speculation has fully overlapped the impact of OPEC + production cuts and Iran and Venezuela's exit capacity. These combined factors have combined to amplify the seasonal trend of crude oil. But now it seems that the possibility of a turning point at the top of the oil price has greatly increased.
Logically, the supply side's story completely controls the price trend, and the demand level is completely forgotten by the market. Whether it is analyzing the historical situation or judging the future market, we must grasp the core of the market supply.
Historical market analysis, the supply story is mainly concentrated in two aspects: First, OPEC + super high yield and reduced yield; Second, Iran and Venezuela's production under US sanctions fell. From the perspective of the future market, the supply side should focus on three aspects: first, whether the US will completely block Iran or export exemptions, and whether Iran will overreact. Second, whether OPEC will increase production according to the US plan to make up for Iran. . The exit of capacity; the third is the US crude oil production.
Regarding the implementation rate of OPEC + production cuts, the latest OPEC monthly report shows that Saudi crude oil production in March was 9.794 million barrels per day, higher than 10.87 million barrels per day. In March, Saudi crude oil production fell by 324,000 barrels per day. Saudi Arabia`s confidence in such a determined cut is unexpected. Crude oil production of 9.8 million barrels per day was also on schedule, and Brent failed to meet Saudi expectations and once again broke the highest pressure level. Saudi Arabia and its firm attitude have always shown that Saudi Arabia is making every effort to rebalance the oil market. Although Saudi Arabia knows that shale oil is stealing its share, Saudi Arabia`s efforts are ultimately to make wedding dresses for shale oil, but Saudi Arabia`s fish and bear's paw are inseparable as part of US interests and domestic demand for high oil prices. Correct. As a result, the tightening of the physical market will continue.
On the Iranian issue, under the news that Iran`s exports will be completely blocked by the United States, crude oil prices have soared, and both Brent and Wti have made major breakthroughs. Now, the Trump administration has proposed negotiations with Saudi Arabia, the United Arab Emirates, Saudi Arabia and the United Arab Emirates to increase production to bridge the market gap. In our last report analysis, we pointed out that Trump and Saudi Arabia require different target prices. The current oil price is close to Saudi Arabia's target price, so Saudi Arabia will fill the Iranian gap according to the US plan. In this case, Saudi Arabia will increase production, and after the increase in production or high probability of events in Saudi Arabia, there will be contradictions in other oil-producing countries. Russia is one of the most unwavering contacts. In the foreseeable future, the implementation rate of the OPEC + Production Reduction Alliance will drop significantly. Therefore, the current market focus is the next step of OPEC+. If Saudi Arabia remains firmly determined to cut production, then a long feast will continue. If the US solution is accepted by OPEC+, then this direction may change.
Suppliers also need to pay close attention to US crude oil production. Affected by the fall of crude oil prices to lows, US crude oil production has been hovering around 12 million barrels for a long time, but recent prices have climbed to high levels, and US crude oil production should show signs of recovery. Although global crude oil supply is shrinking under the influence of US political means, US crude oil has just taken advantage of this opportunity to quickly occupy the market. If US crude oil production rises again, the US overcapacity of crude oil will also completely overflow.
In addition, in terms of demand, behind the sharp rise in oil prices, we also saw the shortcomings of increased oil products. Whether in Singapore, the United States, Europe or China, the price difference of refined oil cracking has declined to varying degrees. The US diesel crack spread has fallen to a relatively low level. China's situation is worse than anywhere else, and both gasoline and diesel prices are exhausted, although crude oil prices remain firm. But China's refined oil prices have not risen. In this case, we have been thinking about how long demand will last in the case of high oil prices. Although the gasoline cracking situation in other regions is still relatively good, the main reason is that the fund has spent a lot of real money on the price of gasoline!
According to position data, the US Commodity Futures Trading Commission (CFTC) released a report on Friday (April 26) that crude oil prices are still heating up from April 17 to April 23, and crude oil speculative net long contracts increased by 32,101 shares. Contract to 547,359 contracts.
But last Friday, from the trend of the three major crude oil futures markets, the exit of the bulls continued to be obvious, especially the domestic crude oil futures that can immediately see changes in market positions. Within 24 hours, the capital position decreased by more than 10,000 hands, a drop of nearly 15%, indicating that the bulls have a strong willingness to leave the market. Although international crude oil futures cannot see changes in market positions in time, this is obvious from the perspective of the international crude oil futures market. From the face-to-face action, the bull market resistance is obviously insufficient, indicating that market confidence and expectations have begun to change significantly.
All in all, after the price of crude oil is insane, both the Brent's monthly difference and the net long-term position of gasoline futures are now in a period of cooling. After the best start of the crude oil market driven by more than a decade of multi-resonance, oil prices have reached an important turning point. From May to June, the market will focus on changes in OPEC + production cuts. The Organization of Petroleum Exporting Countries (OPEC) meeting in June this year is very likely to reach an agreement on reducing the implementation rate of production cuts. Then, the market capacity will be released and it is usually expected that the price will be released in advance.
In short, at the current price point of view, the momentum of the market to continue to push up has been ineffective, and high oil prices in stages are likely to occur. Whether it is a unilateral decline of $5 to $10 or a level above the integer level, no adjustment should be made. Therefore, in terms of strategy, we can focus on Brent short-selling opportunities in recent months and distant months, and customers with long positions focus on controlling market risks.
