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[SMM analysis] the oil market reappears the black swan or there is no continuous downward exploration space.
Sep 9,2020 14:58CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

SMM9 March 9: yesterday's financial market black swan reappeared, due to increased concerns about weak crude oil demand, international crude oil futures prices fell sharply on the 8th. Crude oil futures prices in New York fell more than 7 per cent, while London Brent crude oil futures fell below $40 a barrel for the first time in nearly three months. Fortunately, the decline stabilized today, as of press time, the main contract of US Oil was 36.61, down 0.38%; the main contract of oil distribution was 39.67, down 0.1%.

It is understood that Saudi Aramco (Saudi Aramco) cut the price of crude oil exported to Asia and the United States in October. Herima Croft, head of global commodities strategy at Royal Bank of Canada, said the Saudi cut in official prices has raised new concerns about oil demand.

In addition, concerns about oversupply have been heightened by the end of the summer travel boom in the United States and the maintenance of crude oil refineries. The market expects that the prospect of stagnant demand for crude oil for the rest of the year could keep oil prices lower.

The international oil market has strengthened for several months after falling off a cliff at the beginning of the year, and oil prices rose at the end of August when Hurricane Laura caused US crude oil producers to shut down production in the Gulf of Mexico. The two major indicators of crude oil are at a five-month high, and Brent crude rose more than 7% in August, the fifth month in a row. Us crude oil rose for the fourth month in a row. But after entering September, the outer disk oil price fell continuously. Because EIA inventory data show that the month-on-month decline in gasoline demand outweighs the decline in crude oil inventories. In addition, the US employment data continued to be weak after Labor Department data showed that the number of people claiming unemployment benefits reached a seasonally adjusted 881000 last week. The number of people applying for unemployment benefits is still high; non-farm jobs have increased by 1.37 million, but the overall number is still 11.5 million lower than that before the epidemic.

In addition, demand concerns have revived as the number of new novel coronavirus cases in several countries has risen again. Cases are on the rise in parts of India, Britain, Spain and the United States, where infection rates have not been brought under control for months. The rebound in the epidemic could threaten expectations of a global economic recovery, which could affect demand for everything from aviation oil to diesel.

In short, short-term crude oil may be difficult to rebound quickly, but the long stampede market is not obvious for the time being, and the current absolute oil price is not high, if it continues to fall or attract funds to enter the market. As a result, oil prices do not have the conditions for a sustained deep fall, and the decline may stabilize after a violent correction. In the later stage, we will continue to pay attention to inventory, US stocks and the epidemic situation.

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