Two weeks ago, following the sharp drop in oil prices, there was a comprehensive surrender in the market, and the bullish betting on Brent crude oil saw the largest weekly decline in history. The surge in bearish sentiment and the extent of technical selling have put pressure on crude oil, but at the same time indicate that the "price rebound is coming." In the past two weeks, oil prices have risen all the way, pushing Brent crude oil prices to $86 per barrel, the highest since Iran and Israel confronts each other in April. The operating income of 10-30 billion yuan products on the product structure was 401/1288/60 million yuan respectively.

Previously, betting on the rise of Brent crude oil had seen the biggest decline in history.

As shown in the chart below, after the net long position of Brent set the largest single-week decline in history two weeks ago, the net shorts of Brent made the largest rebound since 2016 in the past two weeks.

Just days after Wall Street widely believed that oil prices would continue to plummet to $70 per barrel (or lower), fund managers cut net short positions in Brent crude oil for the second consecutive week, with a decrease of 2020 being the largest since. This caused the overall increase of net long positions. Last Friday, several price differences of Brent crude oil reached their strongest levels since late April, but not only Brent crude oil, net long positions in gasoline also soared to the highest level on record last week.

Paul Horsnell, head of commodity research at Standard Chartered Bank, wrote in a report on Tuesday that with a supply gap of over 2 million barrels per day in August and September, "there is still a long way to go" for prices to rise. He said: "The market is now beginning to respond positively to the supply gap in the third quarter, and the prospects for continued decline in inventory in the fourth quarter and early 2025 have not yet been digested. We expect the upward trend to continue, pushing Brent crude oil prices above $90 per barrel in early Q3. The growth in demand during the peak season is the main reason for the supply shortage."

"The Goldman Sachs analyst Yulia Grigsby wrote that"Brent crude oil prices continue to approach the upper limit of our predicted range, and the average price in the second quarter is consistent with our predicted $85 per barrel. The escalating attacks on Red Sea vessels by Houthi militants and drone attacks on Russia's oil infrastructure escalate, and geopolitical issues are still the focus of the market."

Horsnell also said that the OPEC+ plan to lift the latest supply restrictions will balance the market by the end of next year."However, if the supply and demand situation becomes more unfavorable, we expect the voluntary production cuts to be retreated over a longer time frame."

Vikas Dwivedi, a global analyst of oil and gas at Macquarie Bank, has just raised his Brent crude oil price expectations for Q3 from $83 to $86 per barrel, and expects WTI crude oil price to rise from the previous $78.50 per barrel to $81.50 per barrel.

"Globally, refinery processing rates will increase by 2 million barrels per day YoY in Q3, and US refineries will resume operation after the longest and most arduous maintenance plan in history. Refineries have done a lot of maintenance work and are more fully prepared to operate throughout the summer, and it is expected that unplanned refinery shutdowns will not be as frequent as they were last year. However, the strong performance in Q3 is expected to represent the last cheer of this year. With OPEC+ preparing to reverse production cut policies, US production is expected to increase, and the outlook for the fourth quarter will be even bleaker."

Neil Crosby, a Sparta commodity analyst, wrote:"Buyers in Europe must be strong and sustained to maintain bullish pricing in the North Sea, otherwise BFOET premiums may cool slightly. (Brent, Forties, Oseberg, Ekofisk, and Troll, collectively referred to as BFOET, are the main grades supporting the Brent crude oil contract. )"

Crosby said: "Impacted by factors such as strong seasonal demand in the United States, geopolitical risks in the Middle East, improving management fund positions and expectations of tight supply in the third quarter, the broader oil market has shown an upward trend. In terms of physical delivery, tightening seems to be concentrated in the North Sea, resulting in a significant drop in oil production in the region. There is evidence that Brent crude oil may have been overbought in the short term, while China's crude oil purchases still appear lukewarm."

Finally, Yulia Grigsby of Goldman Sachs wrote:"Brent crude oil prices continue to approach the upper range of our predictions. The average price in the second quarter is consistent with our prediction of $85 per barrel. Houthis' attacks on Red Sea vessels and drone attacks on Russian oil infrastructure are escalating, and geopolitical issues are still the focus of the market."

Goldman Sachs believes in several reasons for bullish pricing: "We predict that commercial inventories of the OECD will continue to decrease, but at a slower pace. Physical inventory worldwide has decreased by 10 million barrels per week, and our tracking of global inventory is still ongoing. The average spread and spot spread both narrowed last week. The number of oil rigs in the United States continued to decline last week, dropping to the level of December 2021. The net position of petroleum fund net longs continued to rise last week. Red Sea flows have dropped 1.5 million barrels/day from the peak in early June due to increased attacks by Houthi rebels on ships. In recent weeks, exports from OPEC's core countries have plummeted, while their domestic demand often rebounded in the summer."