Source: Finance Federation Author: Ma Lan
① The unexpected “steadiness” of the oil market on Monday was very different from the performance of the precious metals market, which soared due to news of the Iranian President's helicopter crash; ② On the other hand, Saudi Crown Prince postponed his visit to Japan due to Saudi King Salman's physical factors, and both major oil producers faced significant political risks; ③ Some analysts pointed out that the influence of geopolitics on the oil market has become inelastic, which is related to OPEC+'s large inventories.
According to various media reports, Iranian President Lehi and Iranian Foreign Minister Abdullahiyan were killed in a helicopter crash on the 19th.
Earlier, affected by news of the crash of the helicopter in which Leahy was riding, commodities changed collectively today, and the prices of precious metals such as gold and silver skyrocketed, but the crude oil market did not perform well.
The sudden major political events in the Middle East also seem unable to break the “peaceful atmosphere” surrounding the crude oil market. As of Monday's press release, the Brent crude oil main chain futures price has risen by 0.43%, while the main link price of WTI crude oil has risen 0.3%. Last week, Brent crude rose about 1%, the first weekly increase in three weeks.
In addition to the plane crash in Iran, Saudi Arabia, a major oil producer in the Middle East, also revealed some political risks. Saudi Crown Prince Mohammed bin Salman postponed his planned visit to Japan on Monday, citing concerns over Saudi King Salman's health problems.
Japan's official cabinet chief, Hayashi Yoshimasa, revealed that King Salman, 88, was being treated for lung inflammation.
Limited fluctuation
IG Markets analyst Tony Sycamore pointed out that political instability in two major oil producers is affecting the crude oil market. He predicted that the price of WTI crude oil may rise to 83.5 US dollars, which is about 5% higher than the current price. He also said that China's recently introduced measures to boost real estate are also one of the factors driving up oil prices.
Saul Kavonic, an energy analyst at MST Marquee, said that although King Salman's health is worrying, Saudi Arabia's energy strategy will remain continuous under the leadership of the Crown Prince.
Warren Patterson, head of commodity strategy at Dutch International Group, also believes that the oil market remains range-bound. The market is currently becoming more and more numb to geopolitical developments, probably because the OPEC organization has a large amount of idle production capacity, so the market is less concerned about the supply side.
He stressed that without a new catalyst, the market will have to wait for further OPEC+ policies to be released before we can see significant changes in the oil market.
The OPEC+ organization plans to hold a meeting on June 1 to clarify the next phase of oil production plans.
Last week, expectations of interest rate cuts were boosted again as US inflation showed signs of slowing, and the prospect of a depreciation of the dollar supported oil prices. In addition, the market was encouraged by the US government's purchase of 3.3 million barrels of oil to supplement strategic reserves.
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