In just a few weeks from the end of the month to the beginning of April, the international oil market was in turmoil again. The geopolitical situation in the Middle East and Eastern Europe pushed up the prices of the two major international benchmark oils. The price of Brent crude oil stood above US$90 per barrel for the first time this year. Among them, the May contract of NYMEX WTI crude oil futures exceeded US$87/barrel on April 5 and closed at US$86.72/barrel; the June contract of ICE Brent crude oil once exceeded US$91/barrel on April 5 and closed at US$90.86. /barrel, setting a record since November 8, 2022.
Industry insiders pointed out that the oil price level of US$90 per barrel is the "fear premium" brought about by the escalation of geopolitical conflicts, further proving that the geopolitical situation is the biggest uncertain factor affecting the trend of the oil market this year.
As the situation in the Middle East escalated, international oil prices rose to a five-month high. On April 5, Brent crude oil reached US$91.17/barrel, which was the highest price since October 20 last year and the first time this year to exceed US$90/barrel. The US WTI price reached US$86.91/barrel.
Industry insiders said that the two major international benchmark oil prices formed a "golden cross" pattern in the first week of April, that is, the 50-day moving average exceeded the 200-day moving average. This was a bottoming signal in the early stages of the rise, indicating that the price has Conditions are met for the upside.
On April 10, due to market concerns about the possible outbreak of a new conflict between Iran and Israel, the two major oil prices rose again, with Brent crude oil closing at US$90.48/barrel and U.S. WTI closing at US$86.21/barrel.
As Brent crude oil prices broke through the long-term resistance level of US$90 per barrel, the market became highly concerned about the future trend of oil prices. Argus, an international energy and commodity price assessment agency, said in an interview with a reporter from China Energy News: "We believe that the two major international benchmark oil prices will further rise. It is expected that the price of Brent crude oil will increase from the average price of US$85.4 per barrel in March. Rising to US$90/barrel, the average price in May will further rise to US$92/barrel."
Argus believes that Brent crude oil prices will ease in June but will remain above $90 per barrel. However, if the additional production cuts agreed by "OPEC+" in November last year begin to gradually return to the market in the third quarter of this year, the rise in Brent crude oil prices will begin to slow down in July.
Bloomberg pointed out that despite the growth in global crude oil demand, "OPEC+" continued to maintain production cuts, and oil prices in the first quarter have exceeded the previously estimated US$83/barrel.
Bank of America Merrill Lynch believes that Brent crude oil prices are forming a double bottom pattern, paving the way for hitting $112 per barrel.
UBS commodities analyst Giovanni Staunovo said frankly: "The recent price increase has been driven by geopolitical tensions, but fundamental factors such as better-than-expected demand and lower crude oil production also played a role."
ANZ analysis said that due to the improvement of the economic situation, coupled with continued tight supply and rising geopolitical risks, oil prices are expected to rise further in the short term, and has raised its Brent crude oil price forecast to US$95 per barrel.
Morgan Stanley raised Brent crude oil prices to US$92/barrel in the second quarter and to US$94/barrel in the third quarter based on new changes in the geopolitical situation.
In response to the external pressure on upward oil prices, Argus emphasized that the uncertain factors hindering the rise in oil prices include rising inflation delaying interest rate cuts by central banks, global crude oil demand growth lower than previously forecast, continued growth in U.S. crude oil production this year, and geopolitical tensions.
According to analysts quoted by Reuters on the 15th, international oil prices have reached a six-month high on April 12, and after Iran attacked Israel, international oil prices are likely to continue to rise on April 15.
Analysts at oil broker PVM believe the rebound is likely to be short-lived unless supply in the region is severely disrupted.
The analyst further pointed out that since Iran announced that its attack on Israel has ended, whether oil prices will rise further will depend on how Israel responds.
According to previous reports, Israel airstrikes the consular building of the Iranian Embassy in Syria on April 1, killing at least 13 people. Iran's Supreme Leader Ayatollah Ali Khamenei vows to punish Israel. In the early morning of April 14, Iran's Islamic Revolutionary Guard Corps launched a large-scale missile and drone attack on Israeli targets.
