Crude oil: The continuation of the rebound is doubtful, wait and see for the time being

On the evening of April 26, 2022, oil prices in the internal and external markets stabilized and rebounded, and continued to recover the
decline.
With Russia's announcement that it would stop natural gas supplies to Poland, the price of overseas natural gas, diesel and other power generation fuels rose sharply again, driving crude oil to stabilize and strengthen
.
Our view remains unchanged from before, and there is still a risk of
another downside in the coming week.

In the short term, it is recommended to wait and see, and it is not advisable to chase long
.
Once the market's expectations for a short-term escalation of the Russia-Ukraine conflict are falsified, the market is likely to replicate the trend of November 2021 to release the downward pressure
on tightening liquidity.
In particular, the EU issued a guidance document on the 22nd, saying that "it is feasible to use rubles to pay for natural gas to Russia without violating sanctions", which is likely to allow the market to significantly resume exports in the form of short-term trading of Russian crude oil in rubles
.
Such a pullback, if triggered, is likely to rapidly lower inflation expectations and contribute to a further strengthening of real interest rates at a time when the Fed's aggressive balance sheet reduction stance has not changed, strengthening the downward drive
for oil prices.

Therefore, after the initial release of this systemic correction risk in recent days, it is still necessary to be vigilant against the formation of this downward drive in the remaining trading days of April, and oil prices may still fall in the short term after the dollar index breaks through 102
.