International oil prices rose in response to news that the United States will hold an Air Force readiness exercise in the Middle East. WTI crude oil rose by 3.0% intraday to $62.46 per barrel, while Brent crude oil also gained 3.0% to $66.72 per barrel. Due to factors such as the standoff between Iran and the United States and a weaker US dollar, international oil prices have recently been in a period of volatile upward movement. Since January 2026, geopolitical tensions in Venezuela, Iran, and other regions have once again sparked concerns about market supply risks. The US Central Command, responsible for US military operations in the Middle East, issued a statement on the 27th announcing that its Ninth Air Force will conduct a multi-day air combat readiness exercise to demonstrate its capability for rapid deployment, dispersed deployment, and sustained operations within its area of responsibility. This exercise coincides with increasing US military pressure on Iran. The previous day, Central Command announced that the USS Abraham Lincoln aircraft carrier strike group had entered Middle Eastern waters. The US President stated that the military presence near Iran is being enhanced, but also indicated that diplomatic options are not off the table. Iran holds the world's fourth-largest oil reserves, and the Strait of Hormuz is a critical chokepoint for global oil transportation, with 21 million barrels of crude oil passing through daily. Any changes in the Middle East situation could significantly impact energy supplies and transportation. Geopolitical tensions in the Middle East remain a potential source of black swan events for the crude oil market; recurring issues with Iran and risks of shipping disruptions in the Strait of Hormuz could trigger expectations of short-term supply disruptions, driving a sharp rebound in oil prices. The weakening US dollar has also provided conditions for rising commodity prices. On the evening of January 27th, the US dollar index fell sharply. The dollar index once dropped to 95.51, hitting its lowest level since February 2022, with the cumulative decline for the month expanding to over 2.2%. Furthermore, OPEC+ plans to meet this weekend to assess decisions on production policy for the coming month and is expected to stick to the plan of maintaining current output levels. A representative indicated that there are currently no signs suggesting a need to respond to developments related to member countries Venezuela and Iran. In its latest monthly report, the International Energy Agency (IEA) raised its forecast for global crude oil demand growth in 2026 to 930,000 barrels per day, a significant increase from the previous projection of 860,000 barrels per day. The agency noted that the demand growth is primarily driven by an improved global economic outlook and consumption stimulation from lower oil prices. An unexpected adjustment in OPEC+ policy represents a potential upside risk. If oil prices fall more than expected, reaching the fiscal breakeven points of more oil-producing countries, Saudi Arabia might collaborate with core members like Russia to initiate large-scale production cuts, reversing the market surplus. Analysts at Deutsche Bank stated in a report that, due to expectations that the scale of the crude oil supply surplus will narrow in the second half of the year, they have raised their 2026 Brent crude oil price forecast to $61.50 per barrel. Entering the second half of 2026, supply and demand models indicate a significant reduction in the surplus. Factoring in unplanned supply disruptions, the market could very well move towards balance or even a deficit. A Huatai Securities research report stated that geopolitical risk premiums have already led to a bottoming and rebound in oil prices during the off-season. As demand recovers and global strategic inventory builds occur, oil prices are expected to bottom out and rise from the second to the third quarter of 2026. Coupled with the demand stimulus from potential Fed interest rate cuts, refined oil product demand in Asia, Africa, and Latin America may experience an upswing. The report raised its 2026 average Brent price forecast to $65 per barrel (previous forecast: $62 per barrel). In the long term, considering the marginal costs of major oil-producing countries and their focus on "profit over volume," the price floor for oil is supported around $60 per barrel. Leading energy companies with the capability to increase production, reduce costs, and grow their natural gas businesses may present investment opportunities; after oil prices bottom out, inventory losses will decrease, and refining operations are expected to see a cyclical recovery from low profitability. Relevant concept stocks: CNOOC (00883): China's largest offshore oil and gas producer, a major global independent exploration and production group, specializing in upstream exploration and production. PETROCHINA (00857): China's largest integrated oil and gas producer and seller, a global comprehensive giant with business covering the entire industry chain from exploration and production, refining and chemicals, marketing, to natural gas and pipelines. SINOPEC CORP (00386): A top global refiner with the most extensive refined oil product sales network, possessing strong capabilities in petroleum refining, chemical production, and sales.
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