With the advent of a new round of price adjustment cycle, the two major indicators are supported by geopolitical tensions in the Red Sea and stimulated by the news that the OPEC+ alliance may extend voluntary production cuts to the second quarter. However, the delay in the Fed's interest rate cut hopes and the continuous rise in U.S. inventories have limited the room for volatility under the interweaving of long and short factors. Despite this, the retail sales of refined oil products** are still expected to be revised upwards as they are continued**.
On the front, OPEC's February output rose by 110,000 b/d from January, largely due to the restart of the Sharara field, one of Libya's largest oil fields, after its closure due to unrest, offsetting the OPEC alliance's voluntary production cuts. In addition, Gulf oil producers Saudi Arabia, Kuwait and the United Arab Emirates all produced slightly below their voluntary production targets, while Algeria also met its production cuts, but Iraq produced slightly above its production cuts.
Changes in the geopolitical situation are also important factors affecting the ** market. The current Palestinian-Israeli conflict continues, and the United States ** Biden said that this incident will further complicate the ceasefire negotiations between Israel and Hamas. Against this backdrop, there are concerns about the stability of oil in the Middle East. Previously, the market expected that Palestine and Israel would reach a phased ceasefire agreement before the Islamic month of Ramadan, but the matter is still unresolved due to the large differences between the two sides.
Overall, the current geopolitical factors and the OPEC+ production cut decision are expected to support the center of gravity of oil prices, but there are still differences on the demand side. On the one hand, in the context of the Fed's delay in cutting interest rates, U.S. energy demand is supported by strong exports and shows strong resilience; On the other hand, important domestic meetings are about to be held, and there is an expectation of stabilizing demand on the policy side. Therefore, the market as a whole will continue, and the center of gravity is expected to rise steadily.
Russia will implement an additional 47 in the second quarterThe 10,000 b/d voluntary production cut, an additional voluntary cut, is intended to strengthen the precautionary efforts of OPEC countries to support the stability and balance of the oil market. But OPEC+ is likely to face a tougher choice at its next production meeting on June 1, when energy ministers will set their oil production policies for the second half of the year.
It is unclear whether all OPEC+ members will be willing to accept this policy expectation of full-year production cuts. While Saudi Arabia has often urged caution, its neighbor, the UAE, has been keen to capitalize on the scale of recent market investment in new oil capacity equipment. This will not be an issue that will affect the OPEC+ consensus, as stronger demand will allow OPEC to ease its restrictive production cuts and increase the scale of production later this year. The fundamentals of the overall market have improved substantially.
Let's take a look at the technical side, put a WTI chart, the current bulk of the technical reference is of little significance, today is a 4-hour WTI ** chart, ** came out, you can no longer use the previous 30 minutes chart to see, it is expected to be enlarged. This position can be seen in the short term to see the downward **, the upper suppression of 816 waiting for the test, as for our domestic *** need to pay attention to the 610 position of the step back, pay attention to the opportunity to go long, on the contrary, wti** to 786 does not hold, then our 610 still needs to wait and see, this position is long and short, so it does not need to be so perfect, give yourself a chance to stop loss, or expect, remember to change if you are wrong.
Personal advice, for reference only. over