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    Consolidating more than a month, what is the price of oil that is “up and down”?

    2019-02-11 09:17:24

    Futures daily 

    During the Spring Festival holiday, the price of crude oil rose first and then the overall oscillation dominated. After experiencing a low rebound, crude oil prices have been consolidating in this range for more than a month, during which time the fermentation of the Venezuelan incident and the increase in US crude oil inventories have been experienced. During the week of the Spring Festival holiday, Brent crude oil prices fell by 1.22 US dollars / barrel or 1.94%, WTI crude oil prices fell 2.66 US dollars / barrel or 4.81%.

    Brent crude oil prices continued to consolidate last week after rising at a low level of $13. Technically, the pressure on the top allows the bulls to temporarily find a suitable breakthrough. At the same time, the market for the production reduction of OPEC+ needs further observation and confirmation: Russian oil company sent a letter to President Putin, expounding the shortcomings of the reduction of production for Russia's national strategy, and indicated that it does not support the reduction of production; Saudi Arabia's production cuts show that Saudi Arabia is reducing production. A firm position on the issue; the Iranian issue is approaching a critical point, and whether Trump can continue to exempt Iran’s exports will have a great impact on OPEC’s supply; the US stock market continues to rise, and the decline of macro risks provides an upward momentum for oil prices. Wait. In the face of major time nodes, the crude oil market showed greater uncertainty, and the market speculation atmosphere was also cautious.

    First, the US demand is waiting to start

    EIA data showed that crude oil inventories increased by 1.26 million barrels last week, while gasoline inventories increased by 513,000 barrels, continuing to create historical highs.

    At present, the demand for US crude oil is waiting to be launched. During the Chinese New Year, the United States experienced unprecedented cold weather. Under the influence of extreme weather, the demand for US refined oil products has also been greatly affected. This has led to a significant increase in US crude oil inventories and gasoline inventories, and this growth has a superposition of seasonal demand factors.

    However, as the US gasoline inventory seasonally approaches the turning point, the US gasoline demand season is gradually coming, and it is expected to give certain support to the crude oil market at the demand side. The so-called spring and summer to see gasoline, autumn and winter to see diesel, the start of demand for refined oil will be an important turning point for the oil market to accelerate the balance. At the same time, US demand for crude oil in 2019 is much higher than in the same period of the previous year. Trump's tax cuts are gradually reflected in the demand for crude oil, coupled with Trump's concession on the problem of repairing walls, the opening of the US government, The macro-level risks have gradually subsided, and the stabilization of US stocks has also given the market a certain degree of confidence. Therefore, as far as the situation in the United States is concerned, the market still needs to wait for the start of demand, and the sharp increase in demand will drive the price of crude oil to rise further.

     Consolidating more than a month, what is the price of oil that is “up and down”?

     Consolidating more than a month, what is the price of oil that is “up and down”?

    Second, the supply and demand situation improved, non-US market shows strong

    After Venezuela experienced US sanctions and severe domestic inflation, crude oil production in the country with the highest global crude oil reserves has fallen sharply. The current production of crude oil in Venezuela is about 1.2 million barrels per day. However, with the violent domestic violence in Venezuela, upstream investment is blocked and crude oil drilling platforms are declining. Institutions have predicted that there will still be room for a decline in crude oil production in Venezuela.

    At the same time, Saudi Arabia’s production cuts exceeded expectations. According to market sources, Saudi Arabia’s crude oil output fell to 10.24 million barrels per day in January, lower than its target level under the production reduction agreement. Saudi Energy Minister Falih said Saudi crude oil production will fall to 10.2 million barrels in February. Below the day. At the same time, Iranian crude oil exports under US sanctions have fallen sharply. The current crude oil exports have fallen below 500,000 barrels per day, and the peak period has fallen to nearly 1.5 million barrels per day.

    In addition, demand for crude oil in Europe and Asia has shown good growth. Refining input in Europe reached an all-time high, and crude oil imports in China have reached record levels for three consecutive months. Under the pattern of supply contraction and demand, the global floating tank inventory has fallen sharply. Especially, the crude oil floating tank inventory in the Middle East has dropped to near zero value, and the stock level with supply and demand adjustment has fallen to a low value. The contraction of supply and the expansion of demand are bound to aggravate the contradiction between supply and demand. At the same time, we also see that OPEC is constantly raising the premium of crude oil sales, and the pattern of tighter crude oil market in non-US regions has taken shape. The monthly difference of Brent crude oil and the trend of the basis reflect the tightening of the regional market. When the crude oil price repeatedly oscillates, the stability of the monthly difference and the strength of the basis are an important reason why the Brent price is stronger than WTI in the near future. .

    The current market's worries are the huge uncertainty in Russia. Although the Russian oil minister promised to cut production, the degree of cooperation of oil companies is doubtful. This is the main reason why the crude oil market has repeatedly oscillated and hesitated.

     Consolidating more than a month, what is the price of oil that is “up and down”?

     Consolidating more than a month, what is the price of oil that is “up and down”?

    Third, the technical oil price is facing strong pressure

    From a technical point of view, the current pressure on crude oil prices is heavy, and at least three resistances need to be broken. First, Brent's long-term uptrend line from January 2016 to October 2018; second, Brent's 0.382 pressure line for the long-term uptrend from January 2016 to October 2018, these two The line is a heavy shackle on the price of crude oil. Third, Brent's 0.382 pressure line fell from October 2018 to December 2018. Coincidentally, the positions of the three pressure lines are all in the range of 63-64 US dollars. If the crude oil price wants to substantially raise a platform, then it is inevitable that a strong breakthrough will be required.

    In short, from the current situation, crude oil prices will continue to oscillate when demand is not fully launched and Russia is facing uncertainty, and the spring of the oil market will continue to wait. The focus of recent attention needs to be on the fermentation of the Venezuelan event and the spread of the Brent market. In the later period, the crude oil market will choose to continue to oscillate within this interval, and use time to change space, waiting for the market to see more substantial profits and then choose to break through. Therefore, in terms of strategy, we will focus on the opportunities for the Brent moon difference and the opportunities for the US gasoline crack spread. (Author: Haitong Futures)

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    Editor in charge: Dou Xiaowei

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