After hitting a stage high of $91.18 / barrel and $86.97 / barrel on April 12, Brent and WTI crude oil futures prices showed a volatile downward trend, hitting an intraday low of $81.71 / barrel and $76.89 / barrel respectively on May 8.
As oil prices fell, there was also a big withdrawal of smell-sensitive funds. According to data from the U.S. Commodity Futures Trading Commission (CFTC) and the Intercontinental Exchange (ICE), speculative net long positions in WTI and Brent crude oil futures fell by nearly 120,000 contracts last week.
Industry insiders said that speculators sharply reduced their speculative longs and left the market, which means that the future expectations of funds for oil prices have changed significantly.
Oil prices retreated from their high levels
In the past month, the overall trend of international crude oil prices has been weak.
According to Wenhua financial data, since hitting a stage high of $91.18 per barrel on April 12, the price of Brent crude oil futures has fluctuated and fallen, reaching a minimum of $81.71 per barrel. As of 15:00 Beijing time on May 13, the main Brent crude oil futures contract was at $82.69 per barrel. During the same period, the price of WTI crude oil futures also slipped from a high of $86.97 per barrel to a minimum of $76.89 per barrel, and the latest price was $78.17 per barrel. At present, the two are down 9.3% and 10.12% respectively from the high point on April 12.
Brent crude oil futures price trend so far this year
WTI crude oil futures price trend since the beginning of this year
Image source: Wenhua Finance
Liu Shunchang, an analyst at Nanhua Futures, said: "The short-term geopolitical situation and weak demand are the main drivers for the phased correction of crude oil. ”
"On Friday, international oil prices failed to rebound further after rebounding near the key mark, and WTI crude oil futures stopped at only 4 cents from $80 per barrel, and fell sharply from their highs in the night, further confirming the weak operation pattern of oil prices." Yang An, an analyst at Haitong Futures Energy R&D Center, said that the previous decline in oil prices from the end of April to the beginning of May brought the rebound in the first quarter to an end, and oil prices not only gave up the risk premium brought about by geopolitical conflicts in the past period, but also made investors worry about the subsequent supply and demand pattern of the crude oil market.
There was also a big exodus of smell-sensitive funds. The latest U.S. Commodity Futures Trading Commission (CFTC) position data showed that the speculative net long position in WTI crude oil futures decreased by 56,517 contracts to 82,697 contracts in the week ended May 7. In addition, data from the Intercontinental Exchange (ICE) showed that last week, the speculative net long position in Brent crude oil futures decreased by 60,125 lots to 260648 lots. The speculative net longs of the above two types of crude oil futures decreased by 116642 lots.
"On May 1, international crude oil prices broke and fell sharply, forcing speculators to significantly reduce their speculative longs and leave the market, which means that the future market expectations of oil prices have changed significantly." Yang An said that although oil prices rebounded briefly after last Wednesday, the performance of oil prices falling sharply at key junctures on Friday shows that funds do not have the confidence to regain this level at present, and the weak operation pattern has been further consolidated.
In the short term, it is expected to continue to be weak and volatile
Looking ahead, many industry insiders believe that oil prices will continue to be weak and volatile in the short term.
Li Yunxu, senior analyst of SDIC Anxin Futures Energy, said: "The current oil prices are mainly supported by the OPEC+ oil production reduction policy, although it is difficult to falsify the expectation of destocking in the peak season, but the current round of U.S. seasonal destocking performance is not smooth, and the refinery operating rate is relatively low. ”
Yang An also believes that before there are obvious factors to boost market confidence, it is expected that oil prices will continue to test the effectiveness of the lower support area, pay attention to the rhythm, and control the risk.
From a fundamental point of view, Liu Shunchang said that from the supply side, the OPEC+ oil production reduction policy has been steadily promoted, and the overall output has not changed much. On June 1, OPEC+ will hold a production cut meeting to formulate a production cut plan for the second half of the year, and if the demand expansion cannot be confirmed, it is likely that the production cut plan will still be extended. In addition, Iraq and Kazakhstan will face nearly 1 million barrels per day of compensatory production cuts, the United States, Canada, Brazil, Guyana and other places have not yet seen effective increases, Mexico has reduced exports, Russian petrochemical equipment has been frequently attacked by drones, the United States has tightened sanctions on Iran and Russia and reinstated sanctions on Venezuela, and the overall supply side has shrunk.
From the demand side, Liu Shunchang believes that due to the low operating rate of refineries and the seasonal demand boost for gasoline has not yet arrived, gasoline cracking has fallen sharply in the short term, diesel cracking has been sluggish in the short term, and the overall profit of finished products has continued to decline. On the inventory side, due to the low operating rate of refineries, the United States and China both showed inventory accumulation last week, but the rest of Europe and Asia maintained destocking. On the geopolitical front, the easing of the conflict between Iran and Israel has led to a decline in risk premiums.
"On the whole, the current support below crude oil prices is still there, and you can choose to go long when the price stops falling and stabilizes." Liu Shunchang said.
Reviewer: Wang ChaoEditor: Zhang Jing Proofreader: Yu Hongbo Producer: Zhang Nan
Issued by: Fei Yangsheng