The impact of Sino-US economic and trade frictions was absorbed over the weekend, and oil prices entered a short-term recovery rhythm of oversold prices

Source: Energy R & D Center
Oil prices opened higher and rebounded in shock on Monday. The economic and trade friction between China and the United States has been digested over a weekend. Judging from the official statements of both sides, both sides have limited the situation to a controllable and negotiable range. Market sentiment has eased. Risk assets generally rebounded on Monday, and oil prices have also oversold and repaired demand. However, compared with the strong performance of gold, silver and copper, funds are obviously more cautious incrude oil.
China 's bottom line has been made very clear that it no longer accepts any firm opposition from the United States to illegal unilateral sanctions that lack the basis in international law and are not authorized by the United Nations Security Council. China's Ministry of Foreign Affairs stated that the United States threatened with high tariffs, which is not the right way to deal with China. China urges the United States to correct its erroneous practices as soon as possible, be guided by the important consensus reached by the two heads of state on the basis of equality, respect and mutual benefit, resolve their respective concerns through dialogue, properly manage differences, and maintain stable, healthy and sustainable development of Sino-US relations. Therefore, the easing of the situation will inevitably mean that the United States will take the initiative to withdraw its unreasonable trade measures against China. In the next period of time, the entire financial market will pay close attention to the progress of Sino-US economic and trade frictions, which is an important factor in recent fluctuations in various risk assets.
Oil prices in the Middle East continue to weaken, indicating increased supply pressure in the spot market. Saudi Aramco's CEO confirmed that it can maintain a maximum production capacity of 12 million barrels per day for one year without additional costs, alleviating supply concerns. Oil extraction costs are US$2 per barrel of oil equivalent, and natural gas extraction costs are US$1 per barrel of oil equivalent, totaling US$3 per barrel of oil equivalent. There is a high probability that the pressure of oversupply in the crude oil market will gradually put pressure on the market.
It can be clearly seen that as oil prices fall sharply again, market sentiment has cooled significantly. Although oil prices have accumulated demand for oversold rebound after continuous declines, there is no obvious factor that can improve concerns. Before the emergence of factors, the willingness of funds to chase increases is relatively limited, but oil prices are still expected to fluctuate and rebound in the short term to release the need for oversold repair. Against the background of oversupply, investors will also face geopolitical disturbances and the impact of macro factors. Therefore, oil prices will remain highly volatile. It is still recommended to maintain the idea of short selling on rallies when seizing opportunities in the remaining period of the year.
[1] WTI's main crude oil futures closed up US$0.59, or 1%, at 59.US$49/barrel; Brent's main crude oil futures closed up US$0.59, or 0.94% to US$63.32/barrel;INE crude oil futures closed up 0.27% to 452.7 yuan.
[2] The US dollar index rose 0.44% to 99.26; the US dollar on the Hong Kong Stock Exchange rose 0.24% to 7.1127; the US 10-year Treasury bond fell 0.07% to 113.2; the Dow Jones Industrial Average rose 1.29% to 46,067.58.
  Recent news
[1][General Administration of Customs: China's big market is also a big opportunity for the world]
Lu Daliang, spokesperson of the General Administration of Customs and director of the Statistical Analysis Department, said at a press conference that my country is the world's second largest goods import market, and China's large market is also a big opportunity for the world. In the first three quarters, the decline in the prices of some bulk commodities in the international market had a certain impact on the growth rate and data performance of imports. However, in terms of volume, the volume index of my country's imports increased by 0.6% year-on-year. Judging from the monthly trend, as of September, imports have increased for four consecutive months. Driven by domestic production and consumption demand, imports of crude oil, metallic ores, etc. increased by 2.6% and 4.2% respectively in the first three quarters, and the import value of food, tobacco, alcohol, cultural and entertainment products also increased by 10.2% and 9.4% respectively.With the "clearing" of restrictions on foreign investment access in the manufacturing sector, imports from foreign-invested enterprises increased by 1.1% in the first three quarters.
General Administration of Customs: China imported 47.252 million tons of crude oil in September and 49.492 million tons in August. China imported 422.997 million tons of crude oil from January to September.
General Administration of Customs: China exported 5.141 million tons of refined oil products in September and 5.334 million tons in August. China exported 43.004 million tons of refined oil products from January to September.
[2][Middle East crude oil benchmark prices fell for the second consecutive day]
(1) Spot premiums of Middle East crude oil benchmarks Oman, Dubai and Murban continued their decline on Monday, showing a downward trend for the second consecutive day.
(2) Cash Dubai's premium on swaps fell 16 cents to US$0.65 a barrel, reflecting intensified pressure on the spot market.
3. Trading data shows that Trafigura and Mercuria will each deliver a batch of Upper Zakum crude oil to Mitsui & Co., Ltd. for shipment in December.
(4) The price of cash in Dubai fell to US$63.45 per barrel, a significant drop from US$64.90 on the previous trading day, and the price of Omani crude oil fell to US$63.90 simultaneously.
(5) China's crude oil imports in September increased by 3.9% year-on-year to 11.25 million barrels per day, and refinery operating rates remained high during the year, forming demand support.
Saudi Aramco CEO confirmed that it can maintain a maximum production capacity of 12 million barrels per day for one year without additional costs, alleviating supply concerns.
7. ExxonMobil warned that the medium-and long-term oil market will tighten, with special emphasis on underinvestment in unconventional assets that may lead to an annual decline rate of as high as 15%.
8. After the United States imposed sanctions on the import terminal of Rizhao Port in Shandong Province, a very large oil tanker originally scheduled to go to the port changed its destination over the weekend
9. The market is balancing weak short-term demand with tight supply expectations in the medium and long term, and prices fluctuate or continue.
[3]Saudi Aramco CEO: Oil extraction costs are US$2 per barrel of oil equivalent, and natural gas extraction costs are US$1 per barrel of oil equivalent, totaling US$3
1. Saudi Aramco CEO stated that despite the market downturn, the chemical business remains a key growth area for the company in the long term.
(2) The company is accelerating the development of natural gas business and has large gas field reserves including unconventional natural gas, with huge development potential.
(3) The company's growth potential in the oil field remains huge.