There Are Many Negative Factors, And The International Crude Oil Rebound Is Limited.

Last week, international oil prices rose.


Although geopolitical situation, demand outlook and stock pressure are the main factors of oil price fluctuations, President Trump's tweets, OPEC officials and news personages also played an indelible role in the rise and fall of oil prices.


Improvement of international trade situation


Last week, one of the factors that contributed to the upward movement of oil prices was the improvement in demand expectations. On the one hand, the two sides launched trade talks this week, the overall result has been changed, the market's expectations for international trade have improved, the worries about the global economic growth have been reduced, the global stock market performance is more optimistic, the demand for crude oil has been improved, and the rising energy of oil prices has been provided.


Economic slowdown has gradually engulfed demand.


With the slowdown in economic growth, OPEC on Friday made a pessimistic outlook for the oil market outlook for the rest of 2019, and stressed that the market will face challenges in the middle of 2020, because OPEC's competitors have increased crude oil production, providing a reason for the organization to maintain a production reduction agreement.


The report shows that if OPEC continues to exploit crude oil at the rate of July, while other conditions remain unchanged, there will be an oversupply of 200 thousand barrels / day in 2020.


In this case, OPEC has the idea of continuing to cut production.


EIA crude oil inventories increase less than expected


Last week's EIA crude oil inventories grew less than expected, and the product oil storage unexpectedly dropped, Saudi Arabia's decline in crude oil supply to the United States, but also to provide oil price rise kinetic energy.


It is worth mentioning that the change in us EIA crude oil inventory has a strong negative correlation with oil prices. Generally, EIA crude oil inventories decline or increase less than expected. They all tend to provide better support for oil prices, and this effect is bigger in the short and middle lines. With the impact of the peak season of winter demand gradually reflected in the data, short-term EIA crude oil inventory declined, which is expected to continue to provide higher oil price kinetic energy.


To sum up, the current situation of crude oil is relatively awkward. OPEC wants to boost oil prices by reducing production. However, as global economic growth slows down, the stock market falls, and the market worries about the need for oil to warm up. The crude oil has been plunged into a wide range of shocks. We predict that crude oil will continue to oscillate this week. Investors need to be concerned about the global stock market and the change in oil stocks. Source: Pacific Financial and financial circles