The crude oil market experienced a series of fluctuations this week. Brent crude oil and WTI crude oil closed down 2.1% and 2.8% respectively. Oil prices fell continuously this Thursday, setting the record for the longest continuous decline since January 2. The minutes of the Federal Reserve's hawkish policy meeting and concerns about inflation, as well as the increase in US crude oil inventories, have jointly curtailed the prospects for crude oil demand.
However, WTI's July crude oil futures and Brent crude oil contract closed slightly higher by 1.11% and closed at $82.12 per barrel, respectively, indicating a subtle shift in market sentiment.
Interpretation of market trends:
Fluctuations in crude oil prices this week were mainly affected by the Federal Reserve's policy stance and US economic data. The minutes of the Federal Reserve meeting showed that policymakers are cautious about long-term maintenance of interest rates and control of inflation, which led to a sharp reduction in expectations for interest rate cuts in 2024 in the financial market. Meanwhile, the unexpected increase in new orders for durable goods in the US and the rise in consumer confidence provided support for the US dollar, but also increased market concerns about slowing demand in an environment of high interest rates.
Institutional Analysts' Views:
Ryan Detrick, chief market strategist at Carson Group, pointed out that the perception that the economy is not slowing down has delayed any expectations of summer interest rate cuts. Dennis Kissler, senior vice president of trading at BOK Financial, anticipates that the market may re-evaluate the current sell-off situation as US demand picks up in the summer. Analysts at Morgan Stanley believe that despite weak demand for gasoline in the US, the unexpected rise in global demand has offset this impact, and the total consumption of liquid petroleum is expected to increase significantly this year.
Technical analysis:
From a technical analysis perspective, after experiencing a continuous decline in crude oil prices, a slight increase in WTI and Brent crude oil futures may indicate short-term stability in the market. However, considering the Fed's policy stance and the impact of economic data, there is still uncertainty about future price trends.
Expectations for the future:
The market is closely watching the OPEC+ meeting to be held on June 2 to discuss whether to extend the production reduction agreement. Production cuts are generally expected to be extended until at least the end of September. Furthermore, production trends in Russia and Venezuela, as well as the data published by the US Commodity Futures Trading Commission (CFTC) on increasing net long positions by fund managers, will also have an impact on the crude oil market.
The future trend of the crude oil market will be affected by multiple factors, including global economic conditions, the Federal Reserve's policy decisions, and OPEC+ production reduction agreements. Investors should pay close attention to upcoming economic data and related events to make informed investment decisions.