The contradiction between supply and demand of crude oil is still acute

On March 29, international oil prices fell
significantly.
As of the close, the WTI crude oil futures May contract closed at $105.
96 / barrel, down 6.
97%, and the Brent crude oil futures May contract closed at $112.
48 / barrel, down 6.
77%.

Judging from the news, the UAE energy minister said that he would study the balance between supply and demand at the next OPEC meeting, while the European Union once again reiterated that it was difficult to ban the import of Russian crude oil in the short term, which suppressed the market's sentiment
.
Gu Shuangfei, deputy manager of the South China Futures Advisory Service Department, told the Futures Daily reporter that the news of the early increase in oil prices has been loosened to a certain extent: first, Kazakhstan's CPC crude oil terminal has partially resumed exports, second, it is difficult for the EU to reach an agreement on banning Russian crude oil imports, and third, the market has once again exposed that the United States will continue to release strategic inventories
.
Affected by the news, oil prices fell
sharply yesterday.

"However, the current crude oil supply is still on the tight side, which is difficult to change in the short term, and the gap between supply and demand still exceeds 1 million barrels per day
.
" Gu Shuangfei said
.

In addition, the market is worried about
the outlook of fuel demand in China.
Li Yunxu, crude oil analyst of SDIC Anxin Futures, said that the recent severe epidemic situation in some parts of the country has had a marginal impact on oil demand, domestic refined oil prices are weak, refining profits continue to be under pressure, and the operating rate of local refining in Shandong has fallen from about 66% at the beginning of the year to about 53% last week, and the operating rate of the main refinery is relatively stable
.
Meanwhile, the number of commercial flights worldwide has declined slowly since March, increasing from 12% to 15% in the same period before the pandemic, which is also expected to be mainly dragged down
by domestic flights.
Overseas jet coal demand is still expected to be relatively good overall, but with the intensification of Western sanctions against Russia and rising inflationary pressures, European economic growth may face obvious pressure
in the later stage.

In terms of crude oil supply, the disturbance of supply expectations by the development of the situation in Russia and Ukraine is still dominant, and the market's expectations for Russian crude oil seaborne crude oil exports in April have been low
.
Some analysts said that a crude oil supply gap is imminent, and it is difficult to find buyers
for Russian spot crude oil in April.

"Specifically, last week the Caspian Oil Pipeline (CPC) terminal berth was damaged and crude oil loading was stopped, but on Friday it was reported that some loading activities
had resumed.
As traders, banks and tankers and other participants are more cautious about spot oil transactions involving Russia amid sanctions concerns after the outbreak of the Russia-Ukraine conflict, cargo contracts have fallen sharply since late February, which is expected to be mainly reflected in the shipping schedule and export data starting in April.

Li Yunxu said
.

In addition, it is understood that Russia's state-owned oil pipeline company planned to load tankers with 2.
26 million barrels of crude oil per day from three western ports in April, of which India purchased at least 8 million barrels
.
Gu Shuangfei said that it is still doubtful
whether the current capacity can meet the Russian crude oil export plan.

Gu Shuangfei further said that the main factor affecting oil prices at present is still whether the EU imposes a crude oil embargo on Russia under the Russia-Ukraine conflict, and whether other regions have increased purchases after the export of Russian crude oil to Europe is blocked, which has become the main problem
affecting oil prices at present.
If other regions reject Russian crude, the supply shortage will still be difficult to alleviate, and if new buyers appear, it will mean that the oil trade will be diverted and the global crude oil supply will be less
affected.

Li Yunxu also believes that the recent interruption of crude oil exports from Russia and Kazakhstan through the CPC pipeline has limited the degree of supply variables in the crude oil market to a relatively limited extent, and the core factor determining the later export volume is still the development of the situation in Russia and Ukraine and how the new normal of trade activities evolves after the clearance of sanctions
.
In addition, last week, the International Energy Agency and the US Department of Energy both stated that they may increase the release of strategic oil reserves, and Iran's foreign minister once again stressed at the end of last week that the Vienna talks on the Iranian nuclear agreement are close to reaching an agreement, and there are few remaining differences, and continue to pay attention to the short-term disturbance of relevant news
.

"Overall, the current crude oil market supply expectations are still oscillating around the development of the geopolitical situation, during which large price fluctuations digest risks
.
Recently, due to the difficulty of Europe and the United States in continuing to increase sanctions against Russian oil, and the severe domestic epidemic situation has pressured terminal demand, oil prices may face certain downward pressure
in the short term.
However, with the sharp decline in Russian oil exports in the later stage, if it is confirmed one after another, the near-term contract will continue to be supported under the background of the sharp contradiction between supply and demand at the near end, and the high oscillation situation is difficult to change
.
In the medium term, we need to pay attention to the negative effect
of factors such as the normalization of Russian oil exports and OPEC's acceleration of the pace of production increase brought about by the marginal improvement of the situation in Russia and Ukraine.
Li Yunxu said
.