On May 5, US WTI crude oil futures market prices rose sharply, with the settlement price of major contracts at $24.56/ barrel, up $4.17 or 20.5%. Brent crude oil futures market prices rose sharply, with the settlement price of major contracts at $30.97/ barrel, up $3.77 or 13.87%. Before and after the May Day holiday, the international crude oil futures market went out of the market of "five consecutive rises". According to the monitoring of SunSirs, WTI rose by 60% from April 29 to May 5. The rebound of crude oil is mainly due to the market expectation of restarting economy in many countries in Europe and the United States, as well as the positive production reduction of oil producing countries.

OPEC+ oil producers, led by Saudi Arabia and Russia, agreed earlier to cut production by an average of 9.7 million barrels/ day from May 1, the first two-month cut. At present, the agreement has come into effect. Judging from recent market news, oil producing countries are actually taking action in controlling production. In addition, due to the decrease of demand caused by COVID-19 and the collapse of oil price, many oil production enterprises in the United States have been reducing production or shutting down oil wells due to operational problems. According to data released by Baker Hughes on Friday (May 1), an American oil service company, the number of active oil wells in the United States decreased by 53, to 325; the total number of wells in the United States decreased by 47, to 408; and the number of oil wells in the United States dropped to the lowest level since June 2016. The decline in global production has eased supply pressure to some extent, and the overpressured oil price has a chance to breathe.

In addition, more importantly, the expectation of European and American countries to restart their economies has greatly boosted the crude oil market. Since May, the global epidemic of COVID-19 has been relatively controllable, and the demand of oil market has recovered slightly. In particular, Asian countries such as China, Japan and South Korea have controlled the epidemic situation, and demand has recovered steadily. In addition, according to the news, nearly 20 states in the United States may resume economic activities, and the U.S. fuel demand may be further warmed up, as evidenced by the crude oil data released by API on Wednesday. Although the crude oil inventory is still surging, the gasoline inventory has dropped unexpectedly. Data show that API gasoline inventory decreased by 2.237 million barrels in the week ended May 1, with an expected increase of 325,000 barrels and a decrease of 1.11 million barrels in the previous period. In addition, US crude oil imports increased 247,000 barrels/ day last week.

At present, the international crude oil market has gone through the darkest time, mainly due to the production reduction of oil producing countries and the expectation of economic restart in Europe and the United States. However, there are still many challenges in the oil market in the later period. On the one hand, the global crude oil inventory is still in a hurry, the US crude oil inventory is still growing, and the offshore floating storage is also soaring. According to the current inventory growth level, some institutions predict that the global storage capacity will be exhausted by the end of June, so there is still a lot of downward pressure on the oil price in the medium term. In addition, the demand side should not be too optimistic. As more countries in Europe and the United States restart economies, some of the demand will recover, but at present, the epidemic situation has not been fully controlled, especially in the United States and Russia, the current situation is still severe, and a large area of resumption of production also contains great risks. In general, the pattern of oversupply of crude oil will still exist, and the oil price may continue to bear pressure, so whether the oil price can reverse remains to be seen.

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