International oil prices have been tested by three major events

Three important events in May were related to
international oil prices.
The Fed's interest rate hike meeting on May 5, the OPEC+ meeting on May 5 and the start of reserve dumping in developed countries in May are three major events that will test international oil prices
.
Among the above three events, the Fed's interest rate hike and the OPEC+ meeting have landed, and at present, they are basically in line with
market expectations.
However, the recent crude oil market began to speculate that the European Union will implement a phased ban on oil imports, which has brought some support to crude oil prices, but the overall price level has not changed significantly, and it still maintains a sideways trend
.

On May 5, the Federal Open Market Committee announced that it would raise the target range of the federal funds rate to 0.
75%~1.
00%, which is the first time the Fed has raised interest rates by 50 basis points
since 2000.
OPEC+ member countries' ministerial video talks concluded, and member states decided to continue to implement the 432,000 b/d production increase quota in June, in line with
the market's judgment of continuing the production increase quota of about 400,000 b/d per month.
At the same time, the OPEC+ meeting statement stated that participating oil producers believe that the crude oil market continues to be affected by geopolitics and the new crown pneumonia epidemic, but market fundamentals and consensus on the future direction show that the market supply and demand are balanced
.
Developed countries have set a six-month dumping route, with a total of 1.
3 million barrels
per day.

Since April, crude oil has shown a sideways trend
as a whole.
Taking Brent crude oil futures as an example, they mainly fluctuate
in the range of $100~$110/barrel.
It can be seen that crude oil as a whole shows a trend of shock convergence, the stage high gradually moves down, and the stage low is relatively stable, basically at $95 ~ $100 / barrel
.

Developed countries began to dump reserves in May, and the crude oil market as a whole was not affected
by the news of the dumping in April.
The factors that previously supported the strength of oil prices were basically digested by the market, and it was difficult to drive crude oil prices further upward
.

Comprehensive analysis, in the short and medium term, the strong support below crude oil is still at $95~$100/barrel, but there is strong resistance
near $110/barrel.
The volatility of the short- and medium-term crude oil market has not changed substantially, and the long and short factors are still in a
tug-of-war.
Entering May, the crude oil market supply level, to pay attention to the specific implementation of the EU's phased ban on oil, if some member states enjoy sanctions exemptions, then the impact will be weakened
.
At the same time, the United States and the International Energy Agency (IEA) allied countries strategic crude oil reserve release also need to pay attention, the reserve release will directly increase crude oil supply, thereby filling the gap
caused by the current crude oil export.
In addition, the implementation of OPEC+ monthly production increase and the resumption of shale oil production in the United States also need to be paid attention to, which will also increase the supply
of crude oil market.

At the demand level, we focus on two aspects, first, the effect
of high oil prices on demand.
According to historical data statistics, the price of Brent crude oil futures is higher than $100 / barrel, and there is a clear negative correlation between global crude oil demand and crude oil prices, which means that when Brent oil prices exceed $100 / barrel, demand is likely to decrease
.
Second, the expected slowdown in global economic growth will also weigh on crude oil demand
.
Previously, the International Monetary Fund (IMF) lowered the global GDP growth rate this year and next, and the downward revision of economic growth is bound to drag down the increase in crude oil demand
.
In addition, it is also necessary to pay attention to whether the peak driving season in the northern hemisphere, which began in late May, can be realized
again against the backdrop of high oil prices and high inflation.
Therefore, in general, it is difficult for both the long and short sides of the short-term crude oil market to form a one-sided advantage, and oil prices are likely to continue the sideways trend
.

In the long run, international oil prices will show a downward trend
.
In the future, the supply side will continue to show a state of increasing crude oil production, but the demand side will weaken
overall due to high oil prices and slowing economic growth.
Therefore, in the long run, the relationship between crude oil supply and demand will continue to weaken
compared with the current situation.
In addition, the Fed has started a new cycle of interest rate hikes, global monetary liquidity will gradually tighten, and the reduction of hot money will eventually be difficult to support the current high price level
of crude oil and stock markets.
From the historical price fluctuation of crude oil, $70/barrel is the price level under normal supply and demand, which is acceptable
for both buyers and sellers.
Therefore, in the long run, crude oil prices still have the possibility
of returning to $70/barrel.