Newsletter summary

Oil prices are expected to weaken and then strengthen in May, affected by macro interest rate cuts, supply and demand scenarios and geopolitics; WTI and Brent oil prices fell 5% respectivelyDepositbonusnowagering.74 dollars and 6 dollarsDepositbonusnowagering.54 US dollars, falling below the important support level; OPEC + is more determined to reduce production, and it is likely to continue the production reduction in the second half of the year.

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[market Analysis: oil Price Forecast]

The expectation of a macro rate cut is wavering.DepositbonusnowageringUnder the background, the oil price is under great pressure. The slowdown in economic growth in the second quarter may lead to a drop in demand for oil products. However, due to OPEC's strong determination to cut production, oil prices have fallen deeply.DepositbonusnowageringThe space is limited.

The start of the peak consumer season in May, coupled with the opening of refineries in the United States and observation of oil demand, may herald an increase in market demand. Nevertheless, the market demand this year may not be as good as that of last year.

OPEC + production reduction decision is more likely to continue into the second half of the year, which will provide some support for oil prices.

The influence of geopolitical factors on oil prices can not be ignored. In the short term, uncertainty about a cease-fire could lead to a renewed geopolitical impact on oil prices.

Since April 29th, WTI oil prices have fallen for five consecutive trading days, down to $5.74, or 6.85%, below the $80 support level. Brent oil prices also fell $6.54, or 7.31%, below the $85 support level.

Geopolitical tensions have caused crude oil prices to rise for the fourth month in a row this year. Although the parties have tried to push forward the ceasefire negotiations, substantive results have not yet been achieved.

The analysis of the WTI term structure curve shows that prices have fallen at the same time in recent and far months, the monthly difference has weakened, and the supply shortage is expected to ease significantly.

Commercial crude oil depots in the US added 7.265 million barrels in the week on April 26th, the biggest weekly increase since February, according to EIA.

Refinery operating rates in the United States have fallen further, indicating that refinery demand remains lacklustre. The operating rate is expected to pick up gradually from May to July.

OPEC crude oil production declined in April, and the implementation of the production reduction was relatively stable. At the same time, excess production in Iraq and Kazakhstan will be compensated, demonstrating OPEC's determination to implement the production reduction plan.

The Fed left current interest rates unchanged at its May FOMC meeting and announced that it would slow its contraction from June 1, exceeding market expectations.

April's non-farm payrolls data showed that US payrolls and the unemployment rate were lower than expected, while PMI in the services sector unexpectedly fell below the boom-bust line, reflecting slower growth in the services sector but still high inflation.

Against the backdrop of stagnant inflation in the first quarter, market expectations of interest rate cuts have been delayed many times, and even interest rates have been expected to rise again.

According to a comprehensive analysis, oil prices may adjust weakly and then strengthen in May. The market needs to pay attention to the impact of macroeconomic, changes in supply and demand and geopolitics on oil prices.