Crude oil: weak volatility, limited space below

On March 16, EIA inventory data significantly exceeded expectations, limiting the restorative rally
in oil prices.
The two oils on the outer disk rushed higher and fell, continuing to be weak overall, and the center of gravity shifted
down slightly.
In addition, the continued easing of the situation in Russia and Ukraine has also suppressed oil prices to a certain extent, and we believe that oil prices may continue to remain weak and volatile
in the short term as geopolitical events cool down.
However, from the perspective of crude oil supply and demand, the impact of the Russian supply gap on the global crude oil market in the past week has increased, and the space below is limited, and Brent may bottom
out between $90-95 / barrel.
Black shipping capacity is still lacking, and many types of commodities, including crude oil, have fluctuated
sharply.
Considering that NATO's sanctions against Russia are unlikely to be lifted for the time being, over time, theoretically the global impact of the disruption of Russian crude oil supply will be more intense, and the support brought by the supply-side gap to oil prices will also be amplified
.
Therefore, as long as the Black Sea shipping ecology cannot be restored (there is a certain possibility of falsification, refer to Iran's crude oil exports during sanctions), the short-term strong supply side support of the crude oil market will not end
.
The potential bearish is mainly concentrated in the currency market, the recent upward trend of the dollar index is too fast, and the major commodities denominated in the dollar are all
driven by downward revision of pricing.
Coupled with the rise and fall of the non-ferrous metal system dominated by global nickel prices in the past week, the short-term market sentiment has cooled, and the frequency and magnitude of the phased pullback may also exceed market expectations
.
In addition, the spread of the epidemic in China may also revise down the forecast of crude oil market demand, driving oil prices to break down support
.
It's just that when the supply-side gap is determined and the commodity price is not running for a long time, once this situation occurs, it will provide a better buying point
for commodities, including crude oil.

On the whole, although oil prices temporarily or face a weak shock pattern after rising and retreating in the past week from the perspective of capital game factors, considering that the marginal suppression of the demand side by the rapid rise of commodities will take a certain amount of time to reflect, we believe that the above gap on the supply side will continue to support oil prices in the short term, and it is too early to judge the downward trend of oil prices, and there is still more uncertainty
.