Production cuts boost oil prices, arrival of US gasoline consumption peak season increases demand

On May 24th, yesterday’s oil prices closed higher for two main reasons. The first reason was that the Saudi energy minister warned short-selling speculators to “be careful,” and OPEC is committed to production cuts. The second reason was that the API inventory report showed a decrease of 6.799 million barrels in U.S. API crude oil inventories during the week, and gasoline inventories also fell sharply by 6.398 million barrels, with a forecast of -1.1 million barrels. These two factors indicate a tightening of supply and demand, and have boosted market sentiment. Currently, the logic of crude oil prices is dominated by market sentiment, and it fluctuates repeatedly with changes in macro factors. Positive news of production cuts on the supply and demand side boosts oil prices, while the arrival of the peak season for U.S. gasoline consumption increases demand. However, poor overseas economic data and increased expectations of an economic recession without a clear direction at the macro level, it remains to be seen whether oil prices can return to $80. In summary, oil prices are expected to remain volatile in the short term.