Tina Teng, an analyst at CMC Markets, noted that due to China's weak economic recovery and the strengthening of the dollar, oil prices might be pressured, while Opec+'s production cut policy could support oil prices, expecting this week's oil prices to be characterized by range-bound fluctuations.
The U.S. drilling data released last Saturday by Baker Hughes showed that after eight consecutive weeks of decline, the number of shale oil drilling rigs in the U.S. stabilized at 525 last week. To some extent, this data puts short-term pressure on oil prices, given the strong correlation between drilling platforms and shale oil production since the scale of U.S. shale oil output formed, and the impact of shale oil production on international oil prices.
Additionally, despite financial markets expecting the Federal Reserve to be nearing the end of rate hikes, the CPI and PPI data released last week in the U.S. showed that inflationary pressures in the U.S. are not only far from the Fed's 2% inflation target but also remain stubborn according to the latest data. Meanwhile, influenced by high energy prices, tight food supplies, and other factors, the inflation outlook in the U.S. is not optimistic. This might force the Federal Reserve to maintain high interest rates for longer than expected or to increase rates more times than markets anticipate, thereby supporting the U.S. dollar index and exerting negative pressure on commodity prices.
In its monthly report, the International Energy Agency said that, as part of the Organization of the Petroleum Exporting Countries and its allies (OPEC+), Saudi Arabia and Russia are expected to continue reducing their crude oil production throughout the year. The cutback policy might reduce global crude oil inventories, thus providing long-term support to international oil prices.
Analysts at ANZ Bank stated in a report that the escalating tensions between Russia and Ukraine increase the risk of Black Sea trade disruptions, with about 15%-20% of Russia's crude oil production needing to be transported through the Black Sea. The Russo-Ukrainian conflict could disrupt or block trade activities in the Black Sea region, including the transportation and sale of crude oil.
