In 2024, the chaos in the world has not eased well, and the Russian-Ukrainian conflict continues. The new Palestinian-Israeli conflict and the Red Sea crisis all show that this year's geopolitics is difficult to be completely solved. Under this background, oil prices are likely to replicate the 22-year Russian-Ukrainian conflict and fluctuate in pulses.
First, WTI oil price line of $70
Among the three major oil-producing countries that determine oil prices, Saudi Arabia, together with OPEC and Russia, are currently reducing production to carry oil prices.
Although the degree of internal unity is hard to say, the impact of the crash in 2020 is still vivid, and the production reduction alliance will still be United front as a whole, at least not suddenly open to increase production, so oil prices have a bottom.
The opposite is the United States, which needs to replenish its strategic oil reserves, which everyone knows. Therefore, it is the normal operation of the United States to use its own oil producers to increase production and use financial means to cooperate with bad news to suppress oil prices.
The US government has always expected oil prices to replenish strategic oil reserves within the range of US $70, and every US $70 will bring news of crude oil repurchase by the Energy Bureau. Therefore, even if the oil price does not rise in 2024, US $70 will be an extremely volatile area, which everyone needs to pay attention to.
Second, crude oil has the basis for soaring?
First of all, commodity prices have never stayed in a range for too long in history, and when the balance has accumulated enough, they will always move in a certain direction. At present, the bad news of crude oil is that there is no more news of increasing production except that the United States tries its best to suppress it with the news of sluggish demand, and it is unknown whether the United States can continue to increase production in 2024.
However, it is unrealistic to expect the conflicts in the Middle East to subside naturally, and the surge in oil prices in history is usually caused by supply-side problems. Under this world geographical pattern, it is not surprising that crude oil suddenly soared.
Secondly, technically, oil prices are still in the long-term trend line (5-year, 60-month moving average), which is still bullish for a long time, and is currently close to $70 around $66. The current trend is close to the trend after May 2003, which belongs to the category of double dip. The difference lies in how long the consolidation time around $70 is, so there is no need to rush to decide and track the transaction.
Finally, since this year is an election year in the United States, perhaps the current US government will do its best to suppress the rise of inflation expectations, and it is possible that the oil price will not be too eye-catching, and will rise to around 90-100 US dollars unconsciously, and then suddenly accelerate in 2025. However, no matter which trend, I still have no reason to be bearish, so everyone should be prepared for a protracted war. In my statistics, if crude oil skyrockets, it usually nearly doubles. In the face of such large-scale market, it is necessary to observe more patiently. After all, the range is large, and it is ok to follow up after the trend appears. It is forbidden to toss too much at the bottom.
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