Crude oil prices fell back after a brief high last week and failed to continue the strength of the previous week. However, compared with the performance of the stock market and precious metals, non-ferrous metals and other commodities, they are still relatively resilient, and the overall decline is relatively small. Crude oil prices rebounded sharply in the previous week and touched the 200-day moving average. However, Brent oil prices failed to test the 200-day moving average the last time, so the pressure level of the 200-day moving average is worthy of attention.
A key factor in the slight decline in oil prices last week was the second outbreak of the new crown pneumonia epidemic in Europe. The market Concerns about the demand side have fermented again, causing the overall macro market sentiment to be cautious. U.S. stocks continue to decline, and the U.S. dollar index breaks through the upper pressure line and bottoms. The overall macro situation has a relatively unfavorable impact on the crude oil market.
From a fundamental point of view, the supply side continues to provide upward momentum for prices. The implementation rate of OPEC+ production cuts in August is still relatively satisfactory. The supply side remains tight, which means that short-term oil prices will not rise sharply. Falling base. Although U.S. crude oil production experienced a substantial increase the previous week, last week’s data continued to decline by 200,000 barrels per day. The price only remained at the break-even point of shale oil. It is difficult for U.S. crude oil production to experience a significant increase. Increase.
The demand side is the most important variable in the current market, and it is also an important factor related to the height of future oil prices. In the stage when there is no epidemic and the macro situation is relatively stable, 60-70 US dollars / The price of a barrel is the dividing line of demand. If oil prices want to break through this range and rise sharply, there must be good cooperation from the demand side. During the epidemic stage, US$40-45/barrel is the dividing line for demand.
The steady recovery on the demand side means that the epidemic control must be relatively effective or the vaccine begins to be popularized. Currently, as the temperature drops, the conditions for the spread of the epidemic improve, and Europe has shown a second wave of There are signs of an outbreak, so demand recovery remains elusive.
From the perspective of crude oil prices, the spread of vaccines or the prerequisite for oil prices to enter a bull market, it is expected that the impact of the second outbreak of this epidemic will be much smaller than the first, and will not A devastating blow to the crude oil market. However, in terms of short-term market sentiment, it will still have a certain impact. Therefore, investors must pay attention to short-term market risk control while maintaining a long-term bullish view.
The epidemic broke out again and disrupted the market rhythm
Since 2020, the main trading logic of the crude oil market has shifted to the impact of the epidemic. With the second outbreak of the epidemic in Europe, this concern has begun to spread again.
Judging from the number of newly confirmed cases worldwide, there is still no obvious turning point in the global epidemic. After a brief stabilization in the summer, newly confirmed cases are now showing a rising trend. According to relevant speculation, the favorable temperature for the spread of the epidemic is between 5 and 10 degrees Celsius. If the epidemic repeats the exponential growth in the first stage as the temperature continues to drop, the impact on the global economy will be fatal.
Judging from the number of new confirmed cases, the situation in Asia and the Americas is still not optimistic.
At present, Europe is the first place where the global temperature has dropped below 20 degrees Celsius. The temperature in northern Europe has even dropped below 10 degrees Celsius. , the relatively low temperature is suitable for the spread of the epidemic, so Europe is most likely to be the starting point of the second outbreak of the global epidemic.
As the sun’s direct point moves from the equator to the southern hemisphere, the pressure on epidemic prevention in the northern hemisphere rises sharply. After Europe, the next country that is about to enter the comfort zone of epidemic spread is North America. The temperature in some parts of North America has also dropped below 20 degrees Celsius. Therefore, we need to pay special attention to the spread of the epidemic in North America, especially the United States, and then focus on Asia. The spread of the epidemic in the region.
In terms of vaccine research and development progress, the latest data from the World Health Organization in September shows that vaccine research and development units include AstraZeneca, CanSino, Janssen Pharmaceuticals, Sinovac Holdings, Sinopharm, Moderna and Pfizer and others are on the list. As of now, none of the American pharmaceutical companies developing COVID-19 vaccines has been approved by the FDA for release, but they are all in Phase III clinical trials.
Judging from the current reported news, my country’s vaccine progress is relatively satisfactory, and the epidemic situation abroad is relatively tortuous. At present, domestic vaccines can be used as emergencies, and Chinese vaccines have been injected at home and abroad. of 10Among more than 10,000 people, there was not a single case of adverse reactions. On the contrary, foreign vaccines reported serious side effects.
The epidemic has changed the trading logic of the financial market, and vaccines will also change the trading logic of the financial market.
Moving forward amid short-term market tangles
Last week’s EIA data was generally positive. While U.S. crude oil inventories fell, gasoline and diesel inventories also declined to a large extent, and refined oil stocks also declined to a large extent. The decline in inventory represents the gradual recovery of terminal consumption. EIA data shows that U.S. crude oil inventories fell by 1.63 million barrels, U.S. gasoline inventories fell by 4.02 million barrels, and U.S. refined oil inventories fell by 3.36 million barrels. The change in refined oil inventories reached a new low since March, and full-caliber inventories fell. 9.01 million barrels. In addition, U.S. crude oil production fell by 200,000 barrels per day, and the overall EIA performance was quite good.
After the EIA data was released, the crude oil market experienced a brief upward trend, but the momentum was insufficient and could not be maintained. In the following two trading days, oil prices mainly oscillated, and no obvious signs of strength appeared. The main reason why oil prices are so weak is that U.S. stocks and the U.S. dollar index are not conducive for bulls to break upward.
The Dow Jones Index fell by 2.07% last week, with large declines on Monday and Wednesday. After the Dow Jones Index stabilized slightly on Thursday, there was a larger decline on Friday. rebound. At present, although the Dow Jones Index is at a high level, there is no basis for a sharp decline. If the Dow Jones Index can stabilize or rebound, then the support for crude oil prices will be more powerful. If the Dow Jones Index falls sharply, then the price of crude oil will still be hovering around $40/barrel.
The U.S. dollar index changed its previous downward trend last Monday, rising by 1.69% cumulatively, and successfully broke through the upper pressure level. At present, the U.S. dollar index has reached the next pressure level, and whether it can continue to break through is of great significance. If it is only a small rebound, a weak US dollar index will be beneficial to the upward trend of crude oil prices. If the U.S. dollar index rises sharply, it will have a negative effect on oil prices. However, thanks to the efforts of the supply side, crude oil prices will not fall sharply even if the US dollar index rebounds sharply.
Taken together, we believe that the Brent oil price is US$40/ The price below the barrel is still an absolute low, and it is recommended that investors with price lock-in needs actively plan. In addition, as the National Day holiday approaches, uncontrollable risk factors increase, so speculative positions should be kept within a reasonable range.
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