The settlement of Tuesday's night session saw European and U.S. oil markets briefly surge by over 1.5%, yet crude oil nearly erased all its intraday gains post-settlement, once again printing a candlestick with a long shadow on the daily chart, pushing the standoff between bulls and bears to the extreme.
Intraday price swings of 3% indicate that the market is not short of factors influencing oil price volatility; however, the sideways tug-of-war suggests these conflicting influences are insufficient to drive a sustained directional move. Recent strength in the European diesel market, coupled with falling temperatures boosting natural gas prices in Europe and the U.S.—where U.S. natural gas saw a massive spike, at one point soaring nearly 30%—has also bolstered heating demand for diesel, lifting market sentiment. Oil prices attempted another push higher during Wednesday's night session, but ultimately retreated from their intraday peaks after settlement. The market's focus remains squarely on the unfolding geopolitical landscape and the progress of the supply surplus situation, causing recent oil price movements to seesaw constantly. Overall, oil prices are locked in a stalemate, facing resistance above and finding support below.
Jorge Rodríguez, President of Venezuela's National Assembly, stated the Assembly will "immediately" discuss oil sector reforms. Acting President Rodríguez announced that Venezuela has received $300 million of a $500 million payment from the U.S. for oil transactions, while U.S. authorities have seized the "Sagitta" oil tanker in the Caribbean Sea. The oil market is likely to continue its back-and-forth pattern for now, with high-frequency indicators also providing mixed signals. The outlook remains highly uncertain, prone to sudden, high-volatility swings. At this stage, prioritizing risk management is crucial, with opportunity identification taking a secondary role.
【1】WTI crude oil futures gained $0.93, or 1.56%, settling at $60.36 per barrel; Brent crude oil futures rose $0.98, or 1.53%, settling at $64.92 per barrel; INE crude oil futures increased by 0.91%, closing at 442.5 yuan.
【2】The U.S. dollar index fell 0.49% to 98.55; the Hong Kong Exchange's USD/CNY rate decreased 0.07% to 6.9303; the U.S. 10-year Treasury note fell 0.18% to 111.61; the Dow Jones Industrial Average dropped 1.76% to 48,488.59.
【1】The U.S. Central Command has been ordered to position military personnel for 24/7 operations to ensure high-level support "for the coming month." A senior Pentagon official revealed that the U.S. President will have another opportunity to order strikes against Iran within the next two to three weeks, coinciding with the deployment of U.S. military assets to the region. Officials stated this would help address Israel's security concerns. An assessment suggests the U.S. is expected to launch an attack on Iran soon, with forces continuously deploying to the area. The head of Mossad has held significant talks in the U.S. Israel anticipates U.S. action will deal a decisive blow to the Iranian regime, with Israel expected to join swiftly if military operations commence.
【1】West African crude oil differentials narrowed on Tuesday, as persistently high freight costs continue to erode the region's market competitiveness. Traders are reportedly still awaiting the allocation of term contract volumes. The source noted that shipping costs to Asia have remained elevated for months, continuing to pressure the market, with expectations that seller offers will be further reduced to adapt. Angola's Hungo crude was offered at a discount of $1.70 per barrel to dated Brent. High freight costs have become a key constraint on demand for West African crude, particularly for long-haul shipments to Asian buyers. The narrowing differentials indicate sellers are attempting to maintain market share by adjusting pricing, but demand may still be holding out for more favorable conditions. Future market focus will be on whether freight rates can decline and if West African crude's cost-effectiveness compared to other regions (like the Middle East and the U.S.) can be restored.
【1】Due to forecasts predicting colder weather, U.S. natural gas futures prices surged significantly by 23%. European natural gas prices rebounded on Tuesday, with the Dutch TTF front-month contract rising by €1.92 to €37.10 per megawatt-hour, primarily driven by declining inventories, reduced LNG inflows, and U.S.-Europe tensions. Key data shows EU natural gas storage levels have fallen below 50%, approximately 14 billion cubic meters lower than the five-year average for this season, marking a seasonal low. Supply faces pressure, with intake at two French LNG terminals significantly reduced in late January, alongside market concerns that the U.S. might reduce LNG supplies to Europe as leverage amid geopolitical conflicts. The U.S. accounted for 27% of the EU's total natural gas and LNG imports in a recent period, far exceeding the 6% share in 2021; this heightened dependency amplifies the impact of geopolitical risks on energy security. Market logic suggests that although demand is being suppressed by potential tariff rhetoric and mild weather, thin inventory coverage and a fragile supply structure keep prices highly sensitive to any disruption risk, with summer stockpiling pressure already appearing ahead of schedule.
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