On February 5, WTI crude oil futures market in the United States rebounded sharply to $50.75/barrel, or $1.14, while Brent crude oil futures also rebounded to $55.28/barrel, or $1.32. The rebound of US oil and oil distribution was close to 3%, especially the strong rebound of 4% in WTI. On the one hand, China has made a breakthrough in the treatment of 2019-nCoV, which has weakened the negative impact of the epidemic on the outlook for crude oil demand. In addition, OPEC has released signals to increase production reduction, which has boosted market confidence. Last week, EIA inventory report was slightly positive, helping the oil price to further expand the rise Amplitude.

First of all, China has made new breakthroughs in the treatment of 2019-nCoV. Academician Li Lanjuan's team has developed two drugs with obvious therapeutic effects on 2019-nCoV. At the same time, according to the report, Gilead, the manufacturer of ridcivir, reached an agreement with China's health authorities to support two clinical trials in Wuhan for people infected with 2019-nCoV to determine the safety and effectiveness of ridcivir as a potential treatment for coronavirus. In addition, there are reports that UK researchers have also said they have made "major breakthroughs" in the search for vaccines. This is expected to improve the control effect of the epidemic in the future, thus reducing the adverse impact on the prospects of crude oil demand.

Second, on Tuesday, technical representatives of the 23 OPEC+ member countries met in Vienna. It is reported that OPEC+ may further reduce production by 800,000 to 1 million barrels to cope with the impact of global public health events on demand. It was previously reported that OPEC+ initially considered cutting production by 500,000 barrels, but later realized that this was not enough to help the market out of the current predicament, so it doubled the reduction. The increase of production reduction plays a strong role in supporting the oil price.

In addition, the latest inventory data released by EIA is not all bad. Although the EIA reported an increase of 3.355 million barrels to 435 million barrels in U.S. crude oil inventories for the week ended January 31, the market estimated an increase of 2.861 million barrels. Crude oil inventory did increase significantly, but the U.S. refined oil and refined oil inventory data tended to be positive. U.S. refined oil inventory decreased by 1,512,000 barrels, recording a decline for three consecutive weeks, and the market estimated that 193,000 barrels were reduced. Gasoline inventories in the United States decreased by 91,000 barrels, a further decline after 12 weeks of growth, with the market predicting an increase of 1.563 million barrels. Refinery capacity utilization also rose 0.1% to 87.3%. In addition, domestic crude oil production in the United States decreased by 100,000 barrels to 12.9 million barrels per day last week. The inventory data and production of gasoline and diesel in the United States play a positive role in the current oil price environment.

In the near future, SunSirs believes that the impact of China's weakened demand will still play a role, but more favorable occurrences will dilute this negative impact. With the coming period of China's return to work, the demand will pick up somewhat. In addition, the current oil price also has the risk of undervaluation. It is expected that the short-term oil price will still maintain a volatile pattern, which does not exclude the possibility of continued rebound.

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