Short-term Stabilization, Oil Price Hits US$70

In the direct impact of the suicide bombing at the huge Abqaiq oil processing plant in Saudi Arabia, NYMEX March crude oil futures rose by about $2 on Friday to close at $62.91.

NYMEX crude oil futures got rid of the original downward channel last week and completely stood at the integer mark of 60 US dollars. The K line closed a positive line with a long lower shadow line, which is extremely strong.

With the impact of geopolitical factors such as OPEC's expected production cuts and the Iranian nuclear issue and the Middle East terrorist incidents being amplified, international funds may still take advantage of bullish themes in the later period to continue their upward offensive and hit the $70 mark.

When OPEC did not expect to cut production in the early stage, the effects of bullish factors such as the turmoil in Iraq were not fully amplified. But with the emergence of political influence in Iran, and now the unrest in Saudi Arabia and Nigeria, a long positive line in NYMEX oil prices on Friday was a response to this bullish theme.

Since geopolitical bullish factors will still exist for a long period of time, this will provide reasons and basis for international funds to push up oil prices again in the later period. However, the premise for such bullish factors to take full effect must be under the expectation of OPEC production cuts.

The U.S. Energy Information Administration (EIA) said last Thursday that U.S. gasoline inventories only increased by 100,000 barrels last week, but the total reached the highest level since June 4, 1999. It should be said that the emergence of such negative factors is very unfortunate. Conducive to price increases.

Although Saudi Arabia's oil and natural gas production was not affected last Friday and exports remained normal, the market's doubts about crude oil supply have not weakened, so much so that international funds dared to raise oil prices before OPEC discussed its output policy.

When the NYMEX crude oil futures price fell from US$70 to below US$60, there was little disagreement among the Shanghai oil bulls. As the main bulls had unified their thinking, the signs of resistance were very obvious. Since NYMEX oil prices are still in an upward trend, and the mid-term bottom of $60 has been established, the author believes that Shanghai Oil still has strong room for growth in the later period. However, since NYMEX oil prices are unlikely to continue to rise in the short term, the rise in Shanghai Oil should also It is a spiral upward trend.

The prerequisites for a certain variety to start a new round of market are: first, the fundamentals of this variety must be able to support (OPEC production reduction); secondly, the main force of this variety must be prepared and have long-term ambitions. In the market trend in the past two weeks, under the influence of the continuous decline of NYMEX oil prices from 70 US dollars, Shanghai oil has obviously resisted the decline. The main bulls have been actively protecting the market. The overall decline is smaller than that of NYMEX crude oil. This is the best proof.

When the short-term trend is relatively clear, investors must maintain a bullish mindset, but the bullish theme of this geopolitical factor is unlikely to support NYMEX oil prices going too far. From this point of view, the oil price that will be held on March 8 The OPEC meeting (to discuss increasing or reducing production) will be the decisive factor in the mid-term trend of oil prices. Therefore, investors should follow the band operation in the short term.