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Crude oil trading reminder: Multiple negative factors have suppressed oil prices, and oil prices have fallen from a two-month high. Pay attention to the EIA report
2024-06-26
606
In early Asian trading on Wednesday (June 26), U.S. crude oil fluctuated in a narrow range and is currently trading around $80.70 per barrel. Oil prices fell 1% on Tuesday, away from a nearly two-month high, as weak U.S. consumer confidence data heightened concerns about the economic outlook and increased concerns about demand after a sluggish start to the U.S. summer driving season. In addition, hawkish speeches by Federal Reserve officials and unexpected increases in API crude oil inventories also dragged down oil prices.
August Brent crude futures closed down $1, or 1.2%, at $85.01 per barrel on Tuesday; U.S. crude futures fell $0.80, or 1%, to $80.83 per barrel on Tuesday.
Both benchmark crude oil prices rose by about 3% last week, rising for two consecutive weeks and hitting a new high since April.
The U.S. consumer confidence index fell in June, and although households remain optimistic about the labor market and expect inflation to slow over the next year, concerns about a weakening economy may mean that gasoline demand will decrease.
High inventory levels have made investors nervous about the strength of summer driving demand. The latest API crude oil inventories unexpectedly increased by 910,000 barrels, while the market had expected a decrease of 3 million barrels; API gasoline inventories unexpectedly increased by 3.843 million barrels, while the market had expected a decrease of 1.05 million barrels. Refined oil inventories fell by 1.178 million barrels.
However, the official EIA data to be released soon is expected to show a decline in fuel inventories. A Reuters poll released on Tuesday showed that U.S. crude oil and oil product inventories are expected to fall last week.
Seven analysts surveyed by Reuters estimated that crude oil inventories fell by an average of 2.9 million barrels in the week ending June 21.
The EIA said that crude oil inventories fell by 2.5 million barrels to 457.1 million barrels in the week ending June 14, while analysts in a Reuters poll expected a decrease of 2.2 million barrels.
According to analysts' estimates, gasoline inventories fell by about 1 million barrels last week, while distillate inventories, including diesel and heating oil, fell by about 300,000 barrels.
Refinery utilization was estimated to be 0.1 percentage point higher than the previous week's 93.5%, the survey showed.
While supply may fall, consumer spending power and demand may depend on the timing of the Fed's rate cuts.
Fed Governor Cook said on Tuesday that the Fed is expected to cut interest rates if the economy performs as she expects, but she declined to comment on when the Fed would be able to act.
Fed Governor Michelle Bowman said on Tuesday that she still does not think the Fed will cut its benchmark interest rate this year.
"Yes, that is still my view," Bowman said during a question-and-answer session at an event in London when asked to confirm her forecast of no rate cuts for the rest of 2024. "I did not write further rate cuts in my economic forecast statement for most of this year, and I think that will be done in the next few years."
"The market remains divided on the Fed's rate decision, and most people in the crude oil market have already digested the possibility of a 25 basis point rate cut in September," said Dennis Kissler, senior vice president of trading at BOK Financial.
The dollar rose on Tuesday, helped by hawkish comments from Federal Reserve officials and U.S. data showing a stabilizing housing market, both of which suggest the Fed will not rush to start a rate-cutting cycle. This also weighed on demand outlook expectations because
"If you listen to the Fed officials, they are very reluctant to make a big deal about a weak report because overall, the data we have had since the beginning of the year is still very strong," said Jayati Bharadwaj, global foreign exchange strategist at TD Securities in New York.
Supply disruptions caused by Ukraine's attack on Russian oil infrastructure are still supporting the oil market. On June 21, Ukrainian drones attacked four Russian refineries, including the Ilsky refinery, one of the main fuel producers in southern Russia.
However, concerns about the spread of war in the Middle East have cooled, slightly dragging down oil prices.
Israel will work to resolve its conflict with Lebanon's Hezbollah in the coming weeks and prefers a diplomatic solution, Israeli National Security Advisor Tzachi Hanegbi said on Tuesday.
Hanegbi said Israel has been discussing with U.S. officials the possibility that an end to Israel's intensive military operations in Gaza would enable it to reach some kind of "arrangement" with Hezbollah.
Shortly after the Palestinian Islamist group Hamas attacked southern Israel on Oct. 7, sparking the Gaza war, Iran-backed Hezbollah began attacking Israel from the north.
The shelling of Israel's northern border has led to the evacuation of tens of thousands of people from both sides of the border, and the shelling has escalated in recent weeks, raising fears of an all-out conflict.
"We will now invest several weeks to try to reach an arrangement," Hanegbi said at a conference.
"If an arrangement cannot be reached through diplomatic channels, everyone understands that it must be reached through other channels. For now, we prefer to focus on the diplomatic channel," he said.
Hanegbi also said Israel is discussing with Washington a joint effort by the United States, Europe and some Arab countries to find a body to replace Hamas rule in the Gaza Strip.
Gaza health officials and medics said the Israeli army launched three air strikes on Gaza City early Tuesday, killing at least 24 Palestinians.
The war has lasted for more than eight months, but international mediation backed by the United States has failed to reach a ceasefire agreement.
Claudio Galimberti, director of consulting firm Rystad Energy, said: "Geopolitical pressures continue to disrupt the oil market in many ways... In the event that efforts to promote a ceasefire fail, tensions are expected to continue."
The EIA crude oil inventory series data will be released at 22:30 Beijing time, and investors need to pay close attention. In addition, pay attention to the total annualized total of new home sales in the United States in May after seasonal adjustment, pay attention to the results of the Federal Reserve's annual bank stress test, and pay attention to news related to the geopolitical situation.
The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.
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