OPEC's production reduction measures will turn supply and demand

Crude oil as a whole this week is going through a complex shock rebound. I have previously emphasized that from the perspective of the time cycle, the overall future focus will be on whether the low on the 26th breaks below. If it does not break below, the overall trend will be a shock upward, but we still have to wait for time to break through. This week, it rebounded further after gaining support at 76.7, closing up 4.07%, and finally closed at $80.96. From a fundamental perspective, the reasons for the continued complex fluctuations in crude oil prices this week are as follows:

1. Source: Venezuela’s Paraguana oil refining base suffered a power outage. The base’s daily output is 955,000 barrels.

2. IEA monthly report: Oil demand growth in 2024 is expected to be 1.3 million barrels per day; due to OPEC+ production reduction measures, oil supply and demand are expected to turn into a "slight deficit" in 2024. Global oil supply will increase by 800,000 barrels per day in 2024, reaching 102.9 million barrels per day.

3. The overall CPI in the United States unexpectedly rebounded in February; the market is worried that more Federal Reserve officials will adjust their expectations for interest rate cuts to two times this year.

4. The EIA Strategic Petroleum Reserve inventory in the United States increased by 596,000 barrels to 361.6 million barrels in the week to March 8, the highest since the week of May 5, 2023.

5. OPEC Monthly Report: The 2024 global economic growth forecast is raised from .7% to 2.8%, and the 2025 forecast is maintained at 2.9%; the global crude oil demand growth rate in 2024 and 2025 is maintained at 2.25 million barrels/ and 1.85 million barrels per day.

The above factors are the key to the continued upward fluctuation of crude oil, and the core reason is that OPEC+ has implemented new voluntary production reduction measures. The rise in gasoline has pushed the overall CPI higher, and the unexpected rise in inflation will also support oil prices to a certain extent. Moreover, I was worried about the decline of crude oil before. There is a risk of a breakthrough, so I would like to remind you that you need to wait for a breakthrough in time. However, the overall trend is still bullish, especially the upward trend on Thursday. This will be further analyzed later;

From a technical point of view, the overall outlook for next week will remain bullish. In the future, the overall focus will be on whether the low on the 26th is broken. From a time cycle perspective, the overall outlook is bullish until March 29th, so there will be no downside next week. Before 75.8, the market continued to fluctuate and was mainly bullish. But the space up and down here is very large at the moment. Risk control still needs to be done well. Making bold predictions and carefully verifying is the long-term way of trading. It is more based on the intraday strategy. The expected trend chart next week:


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Comment:

Last week, I reminded crude oil not to chase the rise. You can wait for the correction before entering the long position. I also reminded you of the point. You can get a certain profit by entering near 80. I will continue to look long and go long next week. If you want to get trading signals in time, you can follow me and join my channel, which can prompt more trading signals in real time.