Oil prices closed higher on Wednesday, recovering the losses of the previous trading day, and the monthly spread further recovered, which means that oil prices have passed the most pessimistic moment. The bald positive line boosted morale, but the process was not smooth. After investors vented their disappointment by plunging on the first trading day after the meeting, oil prices began to try to organize a rebound in the tug-of-war from Tuesday night trading, but the whole process can be seen to be very difficult. The oversold repair was tortuous, and a large number of disordered shocks and retracements appeared in the rebound of oil prices, which fully reflected that market confidence was at a low level and investors were cautious.

EIA released weekly data showing that commercial crude oil inventories increased by 1.233 million barrels. Although it exceeded market expectations, it was significantly less than the 4 million barrels of accumulated inventory announced by API in the early morning. The accumulated inventory of refined oil also exceeded expectations, but because the data was better than the API data, the impact on oil prices after the announcement of the news was not great. In addition to paying attention to the fundamental changes in the crude oil market, investors are also affected by macro factors. On Wednesday night, the United States released a number of macro data, the Bank of Canada cut interest rates as expected, and the US dollar fluctuated, which also brought disturbances to the commodity market. The interest rate decisions announced by the European and American central banks on Thursday are expected to continue to affect the market rhythm. In addition, oil prices have also begun to respond to geopolitical factors, which means that investors' pessimism has begun to stabilize after venting, and oil prices have started to recover from oversold conditions. The short-term low has probably appeared, but it will take time to repair the confidence that has been hit hard, especially when there are signs of improvement in the supply and demand levels. From the market point of view, the monthly spread has rebounded, which is a good phenomenon. For investors who are concerned about the rebound in the third quarter, pay attention to the rhythm and participate cautiously.

Daily dynamics
[1] WTI main crude oil futures closed up $0.82, up 1.12%, at $74.07 per barrel; Brent main crude oil futures closed up $0.89, up 1.15%, at $78.41 per barrel; INE crude oil futures closed up 1.11%, at 576.3 yuan.
【2】The US dollar index rose 0.15% to 104.31; the US dollar rose 0.05% to 7.2477 against the RMB on the Hong Kong Stock Exchange; the US 10-year Treasury bond rose 0.3% to 110.38; the Dow Jones Industrial Average rose 0.25% to 38807.33.

Recent News
【1】EIA report: Commercial crude oil inventories excluding strategic reserves increased by 1.233 million barrels to 456 million barrels in the week ended May 31, an increase of 0.27%. US Strategic Petroleum Reserve (SPR) inventories increased by 898,000 barrels to 370.2 million barrels, an increase of 0.24%. Cushing inventories increased by 854,000 barrels, gasoline inventories increased by 2.102 million barrels, and an increase of 1.964 million barrels was expected; refined oil inventories increased by 3.197 million barrels, and an increase of 2.532 million barrels was expected. The increase in EIA refined oil inventories in the United States for the week ended May 24 was the largest since the week ended January 5, 2024.
EIA report: Domestic crude oil production in the United States remained unchanged at 13.10 million barrels per day in the week of May 31. The United States imported 7.058 million barrels per day of commercial crude oil excluding strategic reserves that week, an increase of 289,000 barrels per day from the previous week. U.S. crude oil exports increased by 276,000 barrels per day to 4.501 million barrels per day that week. The four-week average supply of U.S. crude oil products was 19.995 million barrels per day, an increase of 1.34% from the same period last year.
The U.S. EIA strategic petroleum reserve inventory in the week of May 31 was the highest since the week of March 31, 2023. The U.S. commercial crude oil imports excluding strategic reserves in the week of May 31 were the highest since the week of March 1, 2024. The increase in EIA gasoline inventories in the week of May 31 was the largest since the week of January 19, 2024. The increase in EIA refined oil inventories in the week of May 31 was the largest since the week of January 5, 2024.
【2】Russia's May oil and gas budget revenue fell 35% month-on-month and increased 39% year-on-year
The Russian Ministry of Finance data on Wednesday showed that in May, the Russian federal budget's oil and gas sales revenue fell by about 35% from April to 793.7 billion rubles (about 8.94 billion US dollars). This was mainly due to the fact that there was no profit tax in May, and the next tax payment will be made in July. Compared with the same period last year, revenue increased by 39%. Mineral extraction tax (MET) revenue increased from 1.08 trillion rubles in April to 1.12 trillion rubles. For the whole of 2024, the government budget will receive federal revenue of 11.5 trillion rubles from oil and gas sales, an increase of 30% from 8.82 trillion rubles last year, reversing the situation that year when natural gas exports fell sharply by 24% due to weak oil prices and Western sanctions.
【3】U.S. Energy Secretary Granholm: As maintenance work at two sites is nearing completion, the United States may increase the replenishment rate of the Strategic Petroleum Reserve. Work on the Strategic Petroleum Reserve (SPR) will be completed by the end of the year. The global oil market is well-stocked and is reassured that oil and gas prices will not rise significantly in the "short term". Even OPEC countries realize that there is a limit to what they can do to manipulate oil prices. It is a good idea to work with allies to establish a strategic resilience reserve for critical mineral reserves to help the energy transition.
We should all be concerned about consolidation in the oil industry. The United States plans to complete its LNG export review in the first quarter of 2025 and does not believe that the suspension of licenses will harm the competitiveness of the United States in the global LNG market. The government wants data companies to use new clean energy sources, including small modular reactors, to meet their future energy needs.