Oil Soars To New 2023 High After This Major Event Happened,$100 Oil Price May Not Be Far
At about 21:00 Beijing time, WTI crude oil price suddenly soared, with an increase of more than 1.35% within a few minutes, while Brent crude oil hit the $90/barrel mark for the first time since November last year.
Affected by this, some domestic futures varieties continued to rise after opening at night, with the main contracts of feed oil and low-sulfur fuel oil (LU) rising by over 2% and SC crude oil rising by nearly 2%.
Saudis announced that it would extend the voluntary production reduction of 1 million barrels per day for three months.
Russia announced that it will continue to voluntarily reduce the oil supply by 300,000 barrels per day until the end of December 2023.
In addition, Saudi Arabia also indicated that it will review the voluntary production reduction decision every month to consider further production reduction or production increase. Saudi Arabia is expected to produce about 9 million barrels per day in October, November and December; Russia, for its part, said it would review its decision to voluntarily reduce oil exports every month to consider the possibility of further reducing or increasing production, depending on the situation in the global market.
In fact, it is not surprising that Saudi Arabia and Russia announced such a decision tonight. I remember a few days ago Russian Deputy Prime Minister Novak has issued a similar warning to extend production reduction with Saudi Arabia.
When we talking about the fundamentals of WTI crude oil, we reminded everyone to focus on the APPEC conference held this week, and we can predict from the technical graphics that after the daily line of WTI crude oil breaks through the previous high of 84.89 USD/barrel, the theoretical goal of the next bulls is to point to the intensive trading area of about 93 USD/barrel in the early stage.
After the favorable landing of crude oil tonight, if it continues to fluctuate upward in the next two days and the space reaches around 93, we should pay attention to the possibility of forming a short-term change window on July 8. Once the change is successful, it will fall back, and the rhythm tends to step back on the bullish trend of the Japanese line level.
Since July 11, we have begun to predict that the bulls of crude oil will rebound and reverse. On July 17, we confirmed that the breakthrough was successful. From that day to the present, it is obvious that crude oil has gone out of a very smooth bullish trend, and even recently it has begun to enter the short squeeze stage.
The first commodity, that is, crude oil, how can it be gold? From the end of July to now, compared with the trend of crude oil price, gold is indeed weaker.
From a fundamental point of view, the Federal Reserve is already in a state of high interest rates, and monetary policy has not yet changed, which is a huge suppression of interest-free assets such as gold. The pressure on the Fed to issue bonds in the last month and the next few months will keep the yield of the bond market at a high level, which is a very unfavorable thing for gold in itself, so gold only rebounds at this stage. There is no reversal;
But crude oil is different.
From the perspective of market demand, on the one hand, who is the world's largest consumer of crude oil? "In the past month or so, the strength, breadth and scope of the policy introduction I have seen are more than what I have seen in the past year." What does this mean? It not only shows that china stock has a policy backing, but also shows that the potential demand for crude oil will rise if our economic stimulus measures continue. Is this the truth?
On the other hand, the economic indicators in the United States, regardless of the logic of the other party, whether it is watered or whitewashed by accounting methods, are telling everyone that the recession of the American economy has been falsified at least this year. Since the economy will not decline, the potential demand for crude oil is great, and the reversal fundamentals are tenable.
Statistics show that the US Department of Energy released nearly 26 million barrels of crude oil from Strategic Petroleum Reserve (SPR) in the first six months of 2023, and 247 million barrels of crude oil have been released since the beginning of 2022.
Previously, the White House sold a large amount of strategic oil reserves to the market to suppress crude oil prices, which could quickly lower inflation indicators and gain more voters' support. Then, when the oil price falls to a relatively low level, SPR will be replenished, thus completing a "high throw and low suction" operation.
Then it is estimated that the most uncomfortable person now is the old Biden, High throwing seems to be a success. The problem is that if you want to suck it back at a low price, Saudis will never give you face.Russia is even less likely to help hit the oil price.
What is the most painful thing for the Fed now, do you know? That is, the interest rate has been increased to the limit, and inflation has not yet reached 2% of the medium-term control target.
What are the more painful things for the Fed in the future, you know? That is, the interest rate is increased to the limit, thinking that inflation has been suppressed, and the result has rebounded.
High oil prices are likely to be the most important driving factor for the inevitable recession of the US economy.
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NQ100 Index Main Connection 2206 (NQmain) $$Gold Main 2206 (GCmain) $$Dow Jones Main Link 2203 (YMmain) $$2205 (NGmain) $$WTI Crude Oil Main Line 2206 (CLmain) $
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