Although China’s demand has boosted confidence in the oil market, suspicions of an economic slowdown and inventory pressure for several weeks are still haunting oil prices, and oil prices that have been unable to break through are still at risk of falling.
Fundamental risks and opportunities coexist in the oil market, and inventory pressure cannot be ignored
Under the sanctions imposed by the United States and Europe, the direct impact of the Russia-Ukraine conflict on the oil market continues to weaken. Unless a new crisis breaks out, the purest relationship between supply and demand will affect oil price fluctuations.
Institutions including OPCE and JPMorgan Chase are optimistic about China’s demand. As the world’s largest oil importer and consumer, the return of China’s economy will benefit the oil market. This has pushed international oil prices to remain high in recent weeks, but due to expectations of a slowdown in the global economy, oil prices have failed to break through key prices.
U.S. crude oil inventory data has affected bullish sentiment for several weeks, with investors worried about the decline in crude oil demand.
The API data released early this morning showed that crude oil inventories increased by 3.38 million barrels in the week ended January 20, from 7.6 million barrels before; Cushing crude oil inventories increased by 3.9 million barrels, from 3.8 million barrels before. API gasoline inventories rose by 620,000 barrels, compared with a previous increase of 2.8 million barrels.
The increase in industry inventory statistics has made the market pay close attention to the U.S. EIA crude oil inventory data at night. Once the official data confirms that the inventory continues to increase, there is a downside risk for crude oil prices, which have been hindered by key resistance for a long time.
WTI crude oil: Multiple resistances below $83.00 remain unchanged
Last week, we pointed out the difficulties faced by oil prices, that is, the price rebound has repeatedly been blocked at $83.00 in the past three months, forming a phased multiple top. In the past week, the bulls rebounded and retested the 83.00-82.00 area without any achievements, and the short-term short-term pressure continued to accumulate. In the absence of mainline guidance in the market, the vigilance of inventory data has become the fuse for the drop in oil prices.
From the perspective of the overall situation, the price of U.S. crude oil fell in a ladder shape, and the key resistance moved down from 93.00 to 83.00. Whether it can break through 83.00 is the key to the market outlook. If it stands at the key price, it will be bullish above $90.00, but subject to this, the price still faces the risk of hitting a new low, and then $70.00 will become the next strong resistance.
In the short-term fluctuations, focus on the 78.50-79.00 area, which is the recent support, and maintain a strong consolidation at the top. Once it breaks below 78.50, oil prices will face the risk of a rapid decline, and then fall to 75.00-73.00, which will open the possibility of oil prices weakening again prelude.
Focus on the U.S. EIA crude oil inventory data at 23:30 (GMT+8) today.
(by Arthur)
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