Crude Oil Market: Near-term Supply-Demand Tightness; A Potential Turning Point Ahead
U.S. refiners are facing pressure from a decline in crude oil supply, with the strained situation peaking in the late July period. Multiple factors are jointly lifting crude oil fundamentals.
First, the U.S.-Iran conflict has escalated again. Passage through the Strait of Hormuz is hindered, Middle Eastern crude supply is interrupted, and global onshore inventories are rapidly drawn down.
Second, utilization rates at U.S. domestic refineries are as high as 97%. Running at full capacity to meet export demand further consumes already tight domestic crude inventories.
Third, global refining capacity is broadly constrained. There are clear bottlenecks in converting crude into refined products, which amplifies structural shortages in the market.
Supported by both geopolitical conflict and high-refinery utilization, WTI and Brent crude fundamentals are relatively strong in the near term, with spot and futures markets receiving solid support.
However, this tight balance will not last forever. From September to October, U.S. refineries will enter the traditional fall maintenance season, and refining runs will decline proactively. As a result, the pace of crude consumption may slow, and inventories are expected to rise again.
This implies time-based divergence in price action: in the short term, oil prices will stay strong due to supply disruptions; later, as the maintenance season arrives and supply-demand tightness gradually eases, oil prices will face downward pressure.
Geopolitical risk remains the biggest wildcard. If shipping through the strait deteriorates again, it will continue to disrupt the direction of short-term oil prices, so it is important to monitor developments and refinery operating data continuously.
(Full text: 346 Chinese characters)
U.S. refiners are facing pressure from a decline in crude oil supply, with the strained situation peaking in the late July period. Multiple factors are jointly lifting crude oil fundamentals.
First, the U.S.-Iran conflict has escalated again. Passage through the Strait of Hormuz is hindered, Middle Eastern crude supply is interrupted, and global onshore inventories are rapidly drawn down.
Second, utilization rates at U.S. domestic refineries are as high as 97%. Running at full capacity to meet export demand further consumes already tight domestic crude inventories.
Third, global refining capacity is broadly constrained. There are clear bottlenecks in converting crude into refined products, which amplifies structural shortages in the market.
Supported by both geopolitical conflict and high-refinery utilization, WTI and Brent crude fundamentals are relatively strong in the near term, with spot and futures markets receiving solid support.
However, this tight balance will not last forever. From September to October, U.S. refineries will enter the traditional fall maintenance season, and refining runs will decline proactively. As a result, the pace of crude consumption may slow, and inventories are expected to rise again.
This implies time-based divergence in price action: in the short term, oil prices will stay strong due to supply disruptions; later, as the maintenance season arrives and supply-demand tightness gradually eases, oil prices will face downward pressure.
Geopolitical risk remains the biggest wildcard. If shipping through the strait deteriorates again, it will continue to disrupt the direction of short-term oil prices, so it is important to monitor developments and refinery operating data continuously.
(Full text: 346 Chinese characters)