Crude oil: rebound or limited, the downward trend of volatility remains unchanged

On the evening of July 7, oil prices in the internal and external markets rebounded
strongly after falling to the previous low resistance level since March the day before.
We believe that although the energy shortage situation in Europe is still severe, the core contradiction of short-term trading in the market is that the economic recession under the energy crisis in overseas economies is more negative than the energy shortage itself, and the downward trend of shock is basically established, and the rebound space is limited
.
From the core inflation data of some European countries and regions, there has been a clear inflection point, which has triggered market concerns about the prospect of recession, and North American inflation expectations have fallen
rapidly.
Considering that the Fed has not relaxed its slowdown in raising interest rates for the time being, the US dollar has continued to strengthen recently, the euro has continued to depreciate, and the negative expectations of tightening and recession are stronger
than in June.
After last night's sharp fall, the downward trend of oil prices has basically been established, and the market is in a delicate state of rapid decline in inflation expectations but the actual level of inflation is still at a high level, and be wary of further trend declines
under the risk of deflation.
Among them, WTI may fall below $90 / barrel in the future, and SC may fall below 600 yuan / barrel
.

Looking forward to the second half of 2022, the overseas tightening cycle will accelerate, and there should not be too many doubts
about the risk of a trend peak in commodities.
After the continued low level of chemical profits in the first half of the year, the downward trend of non-ferrous metals since April and the sharp decline in black since June, crude oil was under greater
downward pressure on the plate rotation.
In addition, considering that the path of Russian crude oil flow to the Asia-Pacific region has been fully opened, the market may be suppressed by the marginal negative of Russian oil southward for a long time after the EU stops 90% of Russian crude oil imports before the end of the year, especially the seasonal peak season in the second half of the Asia-Pacific region may
be diluted.
Therefore, in the long run, if oil prices can stabilize and rebound from late June to early July, there may still be a stronger adjustment in the third quarter, and the potential downside may be 20%-30% higher than the high point in the first half of the year (the two oil in the outer market may touch below $100 / barrel, and SC may touch below 600 yuan / barrel).

Of course, the uncertainty of the crude oil market at both ends of supply and demand in the second half of the year is still high, and it is strategically recommended to focus on various arbitrage strategies, please refer to our crude oil semi-annual report released on June 26 "Exploring Deterministic Arbitrage Opportunities in the Reshaped Oil Transportation Pattern--- Crude Oil Futures Market and Investment Outlook in the Second Half of 2022"
.