According to the Market Matrix (Matrix.net), after OPEC+ several oil managers said they did not discuss revising the production cut plan finalized in October, officially denied the previous report of Wall Street Journal . Oil prices launched an V-type rebound, and WTI oil prices soared from $75.27 to $80.50, with intraday fluctuations as high as $5 or more than 6%. Most institutions say that this violent volatility is very unfavorable to the market.
Rebecca Babin, a senior trader at Imperial Commercial Bank of Canada Private Wealth Management (CIBC), said: "The 5% single-day volatility range supports the idea that the extreme risks of commodities make it difficult to enter off-market funds, which leads to a decrease in trading volume and open positions throughout 2022."
Saxo Bank (Saxo) Oli Hansen, head of commodities research at Bank, said: "Recent volatility has hurt both buyers and sellers, which may exacerbate an already troubled market, which is being affected by a decline in trading volume and a decline in open positions. However, with the increase in cases of new crown in China (CHN) COVID-19 , concerns about a decline in demand are widespread."
Wall Street Journal reported that OPEC+ is considering a 500,000 barrels per day increase. After Saudi denies, oil prices rose sharply _By Bloomberg
In the following two trading days, the increase in continued to expand. Some institutions pointed out that in addition to OPEC+'s insistence on reducing production, oil prices are also supported by some other factors.
Commerz (Commerz “It is unclear what impact will the upcoming oil embargo of the EU (EU) and the price cap to be set in the coming days will have on the supply of Russia (RUS). So far, Russia seems to be still looking for enough buyers and even increasing oil production,” she added. “The market will undoubtedly focus on the actual supply in the coming weeks, as it remains to be seen how much production will actually drop after the announcement of a 2 million bpd cut. That is, we believe that these two factors will lower supply, which will support prices in the coming weeks.”
) Chief Investment Officer Mark Hafeller said: "Good prices will not continue to decline considering the supply outlook. We still believe that shorting crude oil volatility is an attractive strategy and recommends risk-taking investors to increase long positions in the longer-term Brent crude oil contract."
For the outlook, he said: "We believe that the Brent crude oil contract underestimates the potential for price to continue to rise. We believe that the oil market will tighten further because OPEC+ is cutting production, and the EU ban on Russian crude oil will lead to a decline in Russian oil production."
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