Crude oil: pullback or not over, be alert to extreme downside risks

On the evening of April 7, internal and external oil prices fell sharply again, Brent fell below $100 / barrel, and SC2205 once approached 600 yuan / barrel, basically in line with our recent report forecast
.
Our core logic of short-term bearish oil prices has not changed, that is, the Fed's further hints at early balance sheet reduction induce a downward correction of the short-term demand side of the market, which is the core of the pressure on oil prices, or continue to trade tightening bearish.

After many members of the IEA announced that the reserve dump revised the market's expectations for the shortage of crude oil spot supply, if Europe's energy imports to Russia will not be greatly interrupted due to the choice of payment currency, the superimposed storage release and the opening of the overseas tightening cycle have accumulated a large amount of negative shorts in the early stage, and oil prices may return to their own financial attributes in the short term to continue to fall
.

Since the sharp adjustment of oil prices in November 2021, oil prices have never traded negative feedback on oil prices under the pattern of extreme shortage on the supply side in the past four months, and the potential downward momentum of the backlog is strong, and the simultaneous strengthening of oil prices and the US dollar has lasted for a long time
.
If there is no new major positive on the supply side, oil prices may continue to fall in the short term under the inertia of price trends, and Brent may test the low of $90-95/barrel
.
Of course, if the market chooses to trade this bearish at the moment, considering that the probability of substantial shortage on the supply side will continue, the probability of short-term market trading global recession risk has also weakened, and the pullback in oil prices will also provide a very good buying point for the future market, and the average price in the second quarter is likely to remain at a high level
.