On July 30, the U.S. WTI crude oil futures market prices fell sharply, with the settlement price of main contracts at $39.92/ barrel, down $1.35. Brent crude oil futures market prices fell, with the main contract settlement price at $43.25/ barrel, down $0.84. Oil prices fell sharply, mainly due to weak US economic data and political uncertainty.

The main reason for the sharp decline in oil prices was that the United States released the initial GDP report on the evening of July 30. The data showed that the real GDP of the United States in the second quarter fell by 32.9%, the worst record since the publication of quarterly GDP data in 1947. At the same time, the actual quarterly rate of personal consumption expenditure in the second quarter of the United States recorded -34.6%, the largest decline in history. As soon as the data was released, oil prices fell sharply, with WTI falling to $38.72/ barrel. Uncertainty in the economic outlook has hit oil prices hard.

In addition, trump tweeted to postpone the election, U.S. stocks also fell sharply, risk assets represented by crude oil in the commodity market were also sold off, and the downward pressure on prices increased. Investors are generally worried about the chain reaction of the capital market caused by the election delay, which challenges the US Constitution and gives us political uncertainty.

Under the current epidemic situation, while crude oil demand is slowing down, there is also a great risk on the supply side. OPEC+ will officially begin to relax the record production reduction on August 1. Oil Producing Countries OPEC+ will officially begin to relax the record production reduction on August 1. OPEC plans to relax the production reduction quota of 2 million barrels/ day from August to the end of the year. Although OPEC+ hopes for economic recovery, the actual situation is not satisfactory at present. Many negative indicators, including weak U.S. GDP data, continue to rise in epidemic cases. If OPEC+ relaxes the production reduction quota, the current balance of supply and demand may be broken again.

Generally, SunSirs believes that at present, the crude oil market is intertwined with long and short positions, and the short position momentum is relatively strong in the short term, and the epidemic situation is still very serious, which is a drag on fuel demand. There are also some uncertainties about the future of the U.S. economic recovery, which will put pressure on oil prices. Superimposed with OPEC+ easing production reduction expectations, oil prices still have downward pressure in the near future.

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