On June 11, U.S. WTI crude oil futures market prices fell sharply, with the settlement price of major contracts at $36.34/ barrel, down $3.26 or 8.23%. Brent crude oil futures market prices fell sharply, with the settlement price of main contracts at $38.55/ barrel or 7.62%, mainly due to the restart of COVID-19 and the record high of U.S. crude oil storage.

After the European and American countries restart the economic fast forward key, the demand for crude oil has rebounded, but the outbreak has brought a second blow to crude oil. On Thursday, U.S. stocks and commodity futures markets, represented by crude oil, tumbled in general, with worries dominating and risky assets selling again.

According to the latest report about COVID-19 released by WHO, the epidemic situation is indeed getting more and more intense. The report showed COVID-19 has increased 128,419 confirmed cases and 5,347 deaths have been reported. The most serious cases in the Americas region were 3,485,245 cases (70,071 new cases) and 189,544 deaths (3,681 new cases). The total number of COVID-19 infections in the United States exceeded 2 million on Wednesday, with new infections rising slightly after a five week decline. Although most states in the United States have cancelled or eased restrictions on activities, fuel consumption is still about 20% lower than normal due to the cautious attitude of consumers. At the same time, the Federal Reserve predicts that the unemployment rate in the United States will reach 9.3% by the end of 2020, which will take several years to fall, indicating that the real recovery of demand may take longer. If demand does not fully recover, U.S. refiners and shippers may be hit again, and investment will be suspended for a long time. The whole crude oil production chain may be in a deeper crisis due to the problem of excess.

In addition, U.S. crude oil inventory reached a record high. Data released by the energy information administration (EIA) on Wednesday showed that U.S. crude oil inventory unexpectedly increased by 5.7 million barrels to a record high of 538 million barrels in the week ending June 5. Before that, analysts had expected that crude oil inventory would decrease by about 1.01 million barrels, mainly due to the recent increase of crude oil imports from Saudi Arabia. This is also the rise of US crude oil inventory after the decline in May, especially the growth of oil products and consecutive weeks, which rekindled the market's concern about future demand.

In the short term, the demand of oil market is still subject to the plague of the epidemic. Before that, governments relaxed the restrictions related to the epidemic and raised the optimism of the recovery of crude oil demand. At the same time, OPEC+ extended the production reduction agreement, which also helped fuel the oil market, leading to soaring oil prices. WTI once broke the $40 mark, and the market selectively ignored the adverse factors that the epidemic was still uncontrolled. In addition, although OPEC+ will continue to reduce production until July, in the long run, the market still faces the risk of oversupply. In particular, some OPEC countries, such as Iraq and Nigeria, fail to abide by the reduction agreement. The negative reduction of production in some countries may cause harm to the cooperation of OPEC+ production reduction alliance. In the view of SunSirs, the short and medium-term oil prices will continue to fluctuate broadly, which does not rule out the possibility that the oil prices will continue to rebound. $40 is still a threshold for repeated exploration of crude oil.

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