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Analysis of crude oil fundamentals
First of all, from the perspective of positive factors, production cuts will boost oil prices. It can still be seen that his determination is to complete the plan as a whole in the next month. Secretary-General Barkindo also said on Wednesday that the agreement is working. The implementation rate of production reduction is expected to increase from the current % to %. News came out a few days ago that Production cuts are likely to be extended and crude inventories are set to fall this year. The pace of decline in global oil inventories will determine the organization's next steps, including whether to extend the production-cut agreement.
In addition, Qatar’s Energy Minister Saada said on Wednesday (June 2) that the implementation rate of the member states participating in the production reduction agreement reached by 10 member countries and 3 non-oil-producing countries to reduce production in the first half of this year currently exceeds 5%. The implementation rate of non-oil-producing countries is estimated to be around %, but their calculation mechanism is not so clear.
A major negative point is the U.S. drilling data. On Saturday (July 2019), the U.S. oil services company Baker Hughes released data showing that the number of active drilling rigs in the U.S. increased by 10% in the week ending March 2019, reaching a new high since 2018. It also marked a fifth straight week of gains, extending a months-long upward trend. Judging from the active oil drilling data released by the United States, the number has been increasing, which also shows that U.S. oil producers are fully enjoying the benefits of the rebound in oil prices by increasing drilling activities.
Summary: The current long-short factors in the crude oil market continue to be anxious, and US shale oil each holds half of the market. Which side is strong, and oil prices will follow suit. However, since the global joint production reduction agreement was reached, it has been working hard to achieve its production reduction commitments, overwhelming shale oil. The increase in oil drilling is expected to have little impact. Oil prices still benefit from production cuts and US crude oil inventories.
Crude oil technical analysis
Crude oil’s four-hour chart is gradually emerging from a top pattern, so the support position for oil prices in the evening is at the bottom of the pattern. The US dollar’s first-line position is almost flat due to the double top position, and the oil price will remain unchanged in the future. If it falls, then this form is considered perfect. At present, the fundamentals of the crude oil market are long and short, while the technical aspect of crude oil is short-term and bearish. After continuous declines on the hourly line, there are currently signs of rebounding. Overall, looking at the oil price at night, we see a wide range of shocks that are more stable, so the operation strategy is high within the range. Underestimation.
Strategy. Short stop loss. Target. Long stop loss. Target.
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