Oil prices have performed extreme performance for two consecutive weeks, leaving long upper and lower shadows on the weekly chart, while trading volume has shrunk significantly in the past week, and oil prices have experienced extreme views. In the first half of the week, under t

The two monthly reports of OPEC and IEA released this week have given some guidance to the market, and the supply side can be said to be in chaos at present. The latest data released by oil tanker tracking agency Petro-Logistics shows that Russia's offshore crude oil exports increased in March compared with the previous month. Russia's offshore crude oil exports increased by 350,000 barrels per day compared with February, nearly 3 million barrels per day. Petro-Logistics also observed that many Russian oil commodities had no destination, and more Russian oil seemed to be flowing to Asia. Many industry insiders predict that the subsequent impact of Western energy sanctions on Russia remains to be seen. According to the IEA's judgment, Russia may stop oil production of 3 million barrels per day since April. However, there are still many different opinions on the final reduction in Russian crude oil exports. Some industry insiders believe that many traders are now working hard to study hidden export methods to bypass sanctions, so the reduction in Russian oil supply may be less than expected in the market. This is also reflected in the recent decline in discounts in the physical goods market. Although the supply is still tight, the tension has obviously eased.

OPEC monthly report data showed that OPEC's oil production increased by 440,000 barrels per day in February to 28.47 million barrels per day, exceeding the increase promised under the OPEC+ agreement. Since March, member countries such as the UAE, Libya have called on OPEC to increase crude oil production. However, at present, Saudi has not made any statement on this and emphasized that it will maintain direct cooperation with Russia. In addition, the market is also paying close attention to the possible lifting of sanctions on Iranian and Venezuela to increase crude oil supply. The IEA judges that if Iran reaches an agreement, oil exports may increase by about 1 million barrels per day in six months, but this may take several months; in addition, the growth in crude oil supply will also come from countries such as the United States, Canada, Brazil and Guyana . The EIA report said that the U.S. shale oil production in April will increase by 117,000 barrels per day month-on-month to 8.708 million barrels per day, the highest level since March 2020. The EIA expects U.S. oil production to rise to an all-time high in April.

Overall, the supply side is working hard to fill the supply shortage caused by sanctions on Russia's crude oil. If the potential for increasing production by all parties is fully mobilized, it can theoretically fill the supply gap caused by the reduction of Russia's exports, but it obviously takes time. The supply in the crude oil market is still relatively tight.

There have also been relatively obvious changes in crude oil demand in recent days. The high oil prices in the early stage have begun to trigger negative feedback on demand. Some experts have begun to warn that as oil prices rise to $125 per barrel, the damage to crude oil demand will gradually be reflected. As oil prices fall from highs, this concern has been alleviated. However, the impact of the Russian-Ukrainian conflict is still fermenting. While Western countries are increasing sanctions on Russia, they are also beginning to have a significant impact on the global economy. US President Biden has repeatedly emphasized that sanctions will destroy the Russian economy. Although Putin says sanctions will only make Russia stronger, the huge impact of sanctions is still very obvious. The recession of the Russian economy in 2022 is basically certain. The sanctions have not only hit the Russian economy hard, but also had a huge impact on Russia's close economic and trade ties. The rising energy and commodity prices have made the world pay high costs, bringing huge inflationary pressure, and hitting the global economic recovery process. According to the OECD, the conflict between Russia and Ukraine may lead to a reduction in global economic growth by 1 percentage point. The damaged economic outlook forced major institutions to lower their crude oil demand growth expectations in 2022. The most representative one is that the IEA lowered the world oil demand forecast from the second quarter to the fourth quarter of 2022 by 1.3 million barrels per day, and lowered the global oil demand growth forecast in 2022 by 950,000 barrels per day to 2.1 million barrels per day, with an average of 99.7 million barrels per day. In addition, the price of Goldman Sachs , which has been sing too much oil, has lowered the price forecast of Brent crude oil in the second quarter by US$15 per barrel. It is expected that the average price of this global crude oil benchmark in the second quarter is US$120 per barrel, but it is expected to rebound to US$135 per barrel in the second half of this year.

At the macro level, this week the United States and the United Kingdom announced hikes in respectively. Fed with the highest inflation rate in 40 years, the Federal Reserve decided to raise interest rates by 25 basis points on Wednesday, and hinted that interest rates may be raised every time in the remaining six meetings this year. At 20:00 on March 17, Beijing time, the Bank of England announced a 25 basis point rate hike to 0.75%, but one out of nine committee members did not support the rate hike. The attitudes of the Federal Reserve and the Bank of England are basically the same, not only to raise interest rates to resist inflation, but also to minimize the negative impact on the economy as much as possible. Inflation must be taken in the short term, but in the medium and long term, we must consider it comprehensively and maintain economic development as much as possible.

This article is from Futures Daily