What Is The Trend Of The Crude Oil And Oil Boom?

Despite the ups and downs of oil prices in the days after the Saudi Amy attacks, the supply disruption in the oil market may not be over yet. More and more people wonder whether Saudi Arabia will be honest about the extent of the damage and the ability to turn it around. The repair time may be longer than Saudi Arabia expects, and the oil supply will break down.

New progress in international trade situation

In the long run, the impact of the global economic outlook on crude oil demand is still the most direct factor affecting oil prices.

According to the call of the 5 Sino US economic and trade team on the day of the month, the two sides agreed to hold the thirteenth round of high-level Sino US economic and trade consultations in Washington at the beginning of October. The two sides will conduct serious consultations in mid September to make full preparations for substantive progress in high-level consultations. The two sides agreed that joint efforts should be made to take practical actions to create favorable conditions for consultation.

Then US President Trump announced in the morning of 12 am Beijing time that the tariff increase time for us $250 billion export to China will be postponed from October 1st to October 15th.

The further easing of the international trade situation will contribute to the further increase of oil prices, which will bring pressure to oil prices, so the market needs to be concerned.

The fundamentals of supply and demand are not optimistic.

On the basic level, the OPEC crude oil production started the accelerated decline process after the extension of the yield reduction agreement. However, combing the extent of production reductions in various countries, we can find that the main contributor to the reduction is Saudi Arabia, and the decline in the output of the non production countries has a more important role in the overall decline in OPEC production, especially in Iran and Venezuela.

If we only look at the supply side, the OPEC countries' policy of reducing production will probably continue and will remain relatively tight for the whole real market.

But if we look at the overall fundamentals from the perspective of the United States, the situation does not seem to be very optimistic. At the turning point of the peak demand season in the US, whether the US crude oil inventories or the US refinery operating rates all point to the fundamentals of the oil market are about to change.

EIA gasoline inventories and refined oil inventories increase

First of all, from the inventory cycle, the US crude oil inventory decline stage is coming to an end, and this week's EIA inventory data shows that the US crude oil inventories show an increasing trend. With the coming of inflection point, US crude oil inventory will have a potential negative effect on oil prices.

EIA's short-term energy outlook also illustrates the weakness of the four quarter fundamentals. The latest EIA supply and demand balance shows that the global market will remain relatively loose in the month of 9-11 when demand weakens, and inventory consumption will decline compared with the whole. This will also drag oil prices up.

　　 To sum up, the price of crude oil in the fourth quarter is basically worrying on the fundamentals. The inflection point of fundamentals will drag oil prices upward. The trend of future prices is still relatively rough, and the conflict between fundamentals and macro level will continue.

But the difference between the fundamentals and the macro position has changed. The macro price is too large and the fundamentals are bad. The overall price of oil will keep oscillating in a certain range. In the short term, the sage mode after the skyrocketing crash will continue for some time.