SMM5, June 6: when the domestic "May Day" holiday, the external financial market ups and downs. Among them, international crude oil futures rebounded strongly, and the US oil June contract rose continuously for six consecutive days, from about US $12 / barrel to US $25 / barrel, and the price doubled on the 6th. Recently, the crude oil market in the liquidity crisis after the lifting of crude oil fundamentals significantly improved, began to come out of the low strong rebound market. Crude oil opened higher in the last session of the day, but the lack of momentum has since narrowed.
WTI6 monthly contract trend
The long-awaited OPEC+ cut in production began, with supply falling to support oil prices. Since May 1, OPEC+ has officially entered the implementation phase of production reduction, and plans to reduce production by 9.7 million barrels per day from May 1. In addition, crude oil producers in the United States, Canada and other countries have also undertaken the corresponding task of reducing production, and it is expected to reduce the supply of 1300-15 million barrels per day from the market in May or from the market. Saudi crude oil exports are expected to fall to about 6 million barrels a day in May, the lowest in nearly a decade, according to industry sources and analysts. But air transport is not expected to rebound soon, which will slow the recovery in fuel demand.
Economic activity and transport have begun to recover and global oil demand has rebounded. Prior to this, many places around the world in order to prevent and control the epidemic and carry out varying degrees of production restrictions, restrictions on traffic. However, the recent improvement in the epidemic in some countries and regions has been evident, and European and Asian countries, as well as several states in the United States, have begun to relax the blockade during the epidemic. Demand for refined oil products such as petrol and diesel has rebounded as countries have begun to gradually lift travel restrictions. Italy, Spain, Nigeria and India, as well as some states in the United States, including Ohio, began allowing some people to return to work and opened construction sites, parks and libraries.
Global oil stocks remain high and digestion remains to be seen. Us crude oil inventories rose 8.4 million barrels in the week to May 1, a higher-than-expected increase, the (API) said on Tuesday. With the lifting of the anti-epidemic blockade and the reduction of production in oil-producing countries, oil prices have recently risen. However, the process of rebalancing the oil market will be tortuous, and the global inventory pressure is still very obvious. Whether the recent continuous rise in oil prices can be sustained or not still needs to be confirmed by the market. In addition, the June contract will expire on May 19, after the May contract reported a clear picture of the trend, and investors were cautious about the June contract.
Overall, the reversal at the bottom of oil prices still needs to be further confirmed, and given the severity of the demand damage, the market may be inclined to accept any good news. By OPEC, Russia and other oil-producing countries to reduce production, multinational epidemic prevention and lifting, oil prices rose sharply. However, the pressure on global oil depots is still difficult to resolve, and many countries have returned to work and production without the full dissipation of the epidemic, and there is the possibility of a second spread, and this rally still needs to be treated with caution.
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