Analysis on the most popular nodes of crude oil ma

2022-08-18
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Analysis of crude oil market nodes

analysis of crude oil market nodes

June 9, 2013

[China paint information] recently, the United States (WTI) crude oil market fluctuated quite frequently, with ups and downs. This tangled state is mainly formed by the confrontation and interweaving of short-term and long-term contradictions. Although there are sufficient reasons for strategic bearish crude oil, the tactical conditions seem to have to wait for some opportunity or event to break this deadlock. Here, make a discussion

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first, the main short-term contradictions are

1. From now on, the United States has entered the peak season of driving in summer. From a normal point of view, gasoline consumption has increased at this time, which may lead to a decline in crude oil inventories and boost the medium-term trend of oil prices. The time limit of this factor is the strongest in mid July. As of the week of May 31, the total demand for oil products in the United States reached an average of 18.78 million barrels a day, an increase of 490000 barrels over the previous week, and the average daily demand for gasoline rose to 882 barrels, the highest level since August 2012

2. The recent sharp fall in the US dollar index has also boosted the crude oil market. Or carelessness and other reasons will show such a bias. Before that, the discussion of the Federal Reserve on reducing QE heated up; But now it is somewhat indifferent, because the recent data of the United States is poor (Friday's non farm employment data is slightly better than expected). The ISM manufacturing index of the United States in May was 49.0, which was the first contraction in seven months. However, in the second half of the year, the Fed adjusted the scale of QE (cutting the monthly bond purchase plan of $85billion). The excellent anti kink, flexibility and flexibility are deterministic events, so the key question is: when? The earliest time point is the Federal Reserve meeting on June. The attitude of the Federal Reserve is important. At the same time, the two companies will announce more synergies in the first quarter of 2019. Pay attention to important economic data

3. According to the latest report of Monita professional organization, it is believed that the bottom of macro-economy and commodity market has appeared, and there is a high probability that commodities (except black and rubber) will continue to rise in the next two months to ensure smooth processing. Among them, China's macro improvement (real estate support, export pull) is the trigger factor. Due to the base number, the monthly PMI may have a super seasonal recovery. If this inference is correct, the rebound of the commodity market will make it difficult for crude oil to fall

in addition to the above short-term positive factors, there is another supporting factor: geopolitical issues (Syria and Iran). This factor has always been an important factor for crude oil to remain at a high level. On that day, if the domestic unrest in Syria is resolved, then the crude oil price must fall sharply. Just like bin Laden was killed in May 2011, crude oil then fell sharply

second, the long-term contradiction between supply and demand has reversed

in the future, crude oil prices will show a downward shift in focus, and strategic bearish crude oil seems to be a deterministic thing. This is mainly because the contradiction between supply and demand in the world and the United States has reversed, and inventories are high. Many institutions have analyzed and demonstrated this. Here, I only intend to recap briefly

1. Inventory is at an all-time high

the latest data shows that the current U.S. crude oil inventory has reached 397million barrels, far higher than the five-year average and at a record high. This inventory level has been the highest since 1931, mainly due to the growth of U.S. imports and its own production. At the same time, gasoline inventories in the United States are close to the highest level in the same period since 1999. This means that even in the peak driving season, its gasoline supply is relatively abundant, and the kinetic energy to push up oil prices is insufficient

on the other hand, OPEC still has 3.72 million barrels per day of remaining capacity (IEA data). This data shows that sufficient production capacity is enough to resist the possible short-term supply imbalance in the market. Therefore, if geopolitics upgrades, its impact on the market is also quite limited

2. The relationship between supply and demand is empty

according to the prediction of the International Energy Information Agency (IEA), global supply and demand continued to be loose in 2013, with an excess of 760000 barrels/day

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in terms of supply, OPEC output remained unchanged and at a high level; Among them, the production of Iraq and Libya increased. At the same time, non OPCE oil producing countries increased significantly, mainly in North America (the United States and Canada)

in terms of demand, except for the obvious economic recovery in the United States, other countries and regions in the world are unstable and weak. Therefore, the growth momentum of global crude oil demand is slightly insufficient

III. evaluation

from the overall perspective, the crude oil market has an internal basis for shorting; However, the downward inflection point seems uncertain. In previous years, this season is usually in a downward state, and it seems difficult to determine this year due to short-term positive factors. However, at present, the oil price is at a relatively high level, coupled with abundant inventory and idle capacity, so the upward space will be limited. On the contrary, with the passage of time, long-term contradictions determine the greater downside risk. In this regard, we estimate that the fluctuation space of WTI oil price in the second half of the year is $100-70/barrel

in terms of strategy, according to the principle of large border operations, the basic positions are arranged when the price does not rise, and an appropriate amount of overweight is added when the conditions are met and the market is verified, together with a narrow stop loss, so as to reduce the opportunity cost of trial orders

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