On April 23, WTI crude oil futures market prices in the United States rose sharply, with the settlement price of major contracts at $16.50/ barrel, up $2.72, or 19.7%. Brent crude oil futures market prices rose sharply, the settlement price of major contracts was $24.79/ barrel, up $4.42, or 21.7%. International crude oil rebounded for two consecutive days, with WTI up more than 40%, mainly due to the accelerated production reduction of oil producing countries, as well as peripheral geopolitical factors.

On Wednesday, US President Trump's tweet made the "US Iran" relationship tense again. Trump said that if the Iranian gunboats were too close to the US Navy ships, the US military would "sink" the Iranian gunboats. The argument was based on the fact that 11 ships of Iran's elite fighting forces had been dangerously close to US ships in the Persian Gulf. At the same time, the head of Iran's Revolutionary Guard said that if Iran's security in the Gulf was threatened, it would destroy American warships. Geopolitical risk factors increase the premium space of crude oil.

In addition, production reduction of OPEC+ and other oil producing countries is gradually put on the agenda, and the combination of active production reduction and passive production reduction has brought a certain boost to the market. Fatih Birol, director of the International Energy Agency (IEA), said on Wednesday that OPEC and non-OPEC might wish to consider further production reduction to balance the oil market, "it is recommended that OPEC+ reduce production as soon as possible." At the urging of the international community, OPEC+ was also more and more aware of the complex and difficult oil price environment. Russian energy minister Novak said publicly that the world was at the most drastic stage of the decline in crude oil demand. It is estimated that the global oil demand will decrease by 20-30 million barrels/ day. The oil production reduction of OPEC+ and other oil producing countries may reach 15-20 million barrels/ day in May, which will improve the situation of the oil market. Novak's production reduction forecast is significantly higher than the share of the previous OPEC+ production reduction agreement, which also alleviates the risk of the market supply side to some extent.

According to SunSirs, the oil price will still fluctuate at a low level in the near future. Although there are some favorable releases at the supply side in the short term, considering the continuous impact of COVID-19, the problem at the demand side is the most critical factor restricting the oil price at present. Even though trump said that the economy of the United States will restart in May, the effect may be greatly reduced in terms of the current situation of the epidemic in the United States. In particular, the global crude oil inventory has risen sharply, and the pressure on storage capacity will only become more and more serious. The growth of commercial crude oil inventory excluding strategic reserves in the United States is much larger than expected. It is also predicted that the global oil storage space may be exhausted in the next few weeks, and the operating rate of refineries may fall again, which will also force oil producing countries to further reduce production. In the future, crude oil may seek rebalancing under the low demand caused by the epidemic.

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