The situation in Russia and Ukraine is tense, oil prices break through $100, and long and short positions are reduced and wait and see

Affected by the current situation, on Monday (February 28), the US stock futures index opened sharply below the board, and the Nasdaq futures plunged 3.
18%.

Safe-haven assets rose sharply, international crude oil prices soared after the open, and the main contract of WTI crude oil futures rose by more than 8% at one point, reaching a maximum of $99.
10 / barrel; The main contract of Brent crude oil futures rose more than 7% at one point, hitting a maximum of $101.
28 per barrel
.

Different from the trend of international commodity prices, on February 28, the domestic commodity futures market fell more or less at midday, precious metals and crude oil varieties flew green, Shanghai silver fell by more than 2%, fuel oil and Shanghai gold fell by nearly 2%, and crude oil fell by nearly 1%; Oilseeds fell first, with rapeseed meal falling by more than 4%, and vegetable oil and beans falling by nearly 4%; The trend of chemicals diverged, soda ash fell by more than 4%, ethylene glycol fell by nearly 4%, but methanol and urea rose by more than 2%; Most of the black series rose, iron ore, hot coil rose more than 2%, and rebar rose nearly 2%.

In fact, last Friday (February 25), WTI crude oil futures and Brent crude oil futures closed down 0.
89% and 0.
51%
respectively.

A report by the Energy Research and Development Center analyzed that a key factor in the fall in oil prices on Friday was that the sanctions introduced by Western countries did not include excluding Russia from the SWIFT system, but as the incident escalated, the United States and the European Union, the United Kingdom and Canada have issued a joint statement announcing that some Russian banks have banned the use of SWIFT.

Haitong Futures believes that the SWIFT system has been partially removed from Russia, and the market is worried that this move will affect Russia's oil and gas supply and settlement to Europe, so the risk of a sharp rise in oil prices has risen sharply again
.
According to CICC Commodities Group's calculations, if the geopolitical risk evolves into an actual supply shock, it cannot be ruled out that oil prices may face a supply premium of about $30/barrel to $120/barrel
for the whole year.

It is worth noting that last week's EIA data showed that crude oil accumulated sharply, far exceeding expectations, but Haitong Futures pointed out that because Russia began to take a full-scale military action against Ukraine, the market temporarily ignored the factors affecting the supply and demand level
.

In terms of fundamental data, data released by the EIA showed that commercial crude inventories in the United States, excluding strategic reserves, unexpectedly increased
sharply in the week ended February 18.
EIA crude oil inventories actually increased by 4.
514 million barrels in the week, down 1 million barrels expected and up 1.
121 million barrels
in the previous month.
In addition, EIA gasoline inventories actually fell by 582,000 barrels for the week, compared with an expected decrease of 1.
5 million barrels
.

According to the research report of CICC Commodities Group, the sudden and unpredictable impact of the geopolitical situation makes the market basically have few choices when facing at the beginning, can only avoid risk first, and there may also be overshoot
under the leadership of emotions.

Baocheng Futures Research Report also pointed out that the speculation of geopolitical themes has caused the recent international crude oil to fluctuate sharply at a high level, and the uncontrollable risk has increased significantly, although there is a geopolitical risk premium, oil prices once rushed through the $100 mark, but based on the current market situation, oil prices break through to stand firm at $100 conditions are not mature
.

At present, institutions continue to reduce net long positions, showing a wait-and-see attitude
.

The U.
S.
Commodity Exchange Commission (CFTC) announced that in the week ended February 22, the New York Mercantile Exchange (NYMEX) crude oil long positions reduced by 62,877 or 3.
11% to 1957145; Bears reduced their positions by 62,934 or 3.
05% to 2000995
.
The total position was 2058132, down 64,626 or 3.
04% from the previous week, and the total number of traders was 356
.

Source: Wind

Industry insiders pointed out that the variables of the crude oil market will further increase in the future, and it is recommended that investors reduce their holdings and turn to a wait-and-see mode to avoid extreme risks
.

In addition, CICC expects that excessive oil prices will raise the US CPI by an additional 0.
1 percentage points month-on-month, further affecting monetary policy, since crude oil exports accounted for 23% of Russia's total exports by the end of 2021, so the reduction in exports will also affect Russia's fiscal revenue and current account surplus
.