章节 18 WTI: The Macro Hype Will Eventually Pass and Back to the Supply and Demand Side（5.16）
Fundamentals
During the Asian session on Tuesday (May 16), WTI oil prices fluctuated in a narrow range. On the macro front, the stalemate in the US debt ceiling negotiations this week weighed on oil prices with macro risk aversion. However, oil prices were able to hold firm at the beginning of the week, more due to the US buyback of the Strategic Petroleum Reserve and rising expectations of tighter global supply.
Supply: Saudi Arabia's crude oil exports continued to decline in May as production cuts took effect. According to Kpler, Saudi crude exports are expected to be 6.48 million b/d in May, down sharply from April. And its output in April was 10.46 million b/d, below the quota in the OPEC deal. In addition, at least the equivalent of 300,000 b/d of refining was shut down in Alberta last week as wildfires raged in Alberta, Canada, and are expected to worsen. Moreover, Nigeria's oil production fell below 1 million b/d in April, hitting a seven-month low. Nigeria previously produced 2.2 million b/d of oil but has struggled to meet its 1.8 million b/d OPEC quota due to stolen crude, damaged pipelines, and a lack of new investment in the sector. Supply may support oil prices in the short term.
Demand: Jennifer Granholm, U.S. Energy Secretary, said the U.S. could begin buying back oil for the Strategic Petroleum Reserve (SPR) after completing Congressional-authorized reserve sales in June. It is expected to buy 3 million barrels of crude oil to replenish SPR, and sellers are required to submit offers by May 31 for delivery in August. It is expected that the replenishment logic will eventually become the main line of trading in the market for a period of time after the macro speculation.
Overall: Although the continued stalemate in the US debt ceiling negotiations has fairly weighed on oil prices, the pressure is not high. As events pass by, risk sentiment is bound to improve. At that time, the macro speculation will gradually withdraw from the main logic of trading, and the market will return to the fundamentals of the oil market. Tight fundamentals will further push oil prices up, breaking through the $70 to $80 platform. The OPEC+ June ministerial meeting may be the starting point for the rally in oil prices.
Technical Analysis
In the daily chart, WTI oil prices are currently up for grabs near the $70 mark, with the overall or bottom zone trend remaining unchanged. If WTI crude oil can effectively stabilize the 70 mark in the future, it will increase the possibility of the market turning into a rally. After this pullback, the bottom pattern will be more solid. Long-term traders can rely on the support of $70 to gradually bullish oil prices in batches and pay attention to whether the $83.0 line can form an effective resistance in the later stage.
Trading Recommendations
Trading Direction: Long
Entry Price: 70.500
Target Price: 80.000
Stop Loss: 64.000
Support: 70.000/64.000
Resistance: 80.000/83.000
