A shift in the oil market's narrative? This Saudi-US "conspiracy" or critique of the bulls

Among the many wild swings Wall Street did not anticipate this week，oil priceIs one of themone。originaloil priceGrid set a record on WednesdayoneThe largest one-day drop in more than a year，The previous data revealed that demand was weaker than expected。Thursday，Due to concerns that slowing global economic growth will weaken consumption，oil priceContinue to fall，Despite news that Saudi Arabia has raised its flagship price for Asian customers for the fifth consecutive monthoil pricegrid。

End of September，American Benchmarkoil pricegridoneRising above $95 a barrel，The recent rebound has sparked speculation，that isoil priceWill soon break through the $100 a barrel level again，Industry experts predict that，oil priceTowards the level of $150 a barrel。

However，WTI crude oil closed near $82 a barrel on Thursday，It fell below the 50-day moving average for the first time since July last year。It has fallen 13.5% in just six trading days.。before，Industrial foreign exchangeData shows a surge in U.S. gasoline inventories，The price of gasoline futures plummeted。

This reversal is drastic，Seems to make sense。But maybeInvestors should remain cautious，oneAn important question is，In the past six days，The economy has really changed so much，Is there any reason for such a decline?？Paul Hickey, co-founder of Bespoke Investment Group, is skeptical。"What's interesting is，Less than two weeks ago，The increase in prices was also attributed to a strengthening economy。Now the price has started to fall，marketThe narrative quickly shifts to an economic slowdown. "，He wrote：

"Is the direction of the global economy really shifting that fast?？If you measure the health of the global economy by the day-to-day movement of volatile commodities like crude oil，You're going to be deaf.。”

So far.，The Narrative of the Oil MarketoneIt's dominated by geopolitics.。Saudi Arabia and Russia are pushing upoil priceThe alliance formed is regarded asoneupheaval。It's not gone away.，But here's what's interesting.，Although Saudi Arabia and Russia have announced voluntary production cuts that will last until the end of 2023，Even the OPEC + committee recommended not to change the collective production cut，Butoil priceThere was a crash.。Supply constraints will push upoil priceThe claim still exists，But this week traders ignored that claim。

The political risk is tremendous，Biden's stakes are high。In the opinion of many people，His diplomatic skills are crucial to the situation。Louis Navellier of Navellier Associates commented：

"Saudi Arabia continues to control theoil priceGreg appears to be working hard to defeat Biden，Because they haven't forgotten Biden's insults to them。Specifically，Biden said during his presidential campaign that，He found that'the current Saudi government has little value in social assistance. '，And promise，If elected president，He will make the Saudi governmentbecomeInternational'untouchables'。I think it's pretty obvious.，Saudi Arabia is maintaining its originaloil priceGogao，withPrompting Biden toIn the 2024 presidential electionunsuccessful。”

Meanwhile, Alan Ruskin of Deutsche Bank focuses on the US government's current efforts to reach a peace deal between Saudi Arabia and Israel，Due to outside speculation，This will also involveoneThe defense alliance between Saudi Arabia and the United States。He expressed that，If this happens，The assumption is thatSaudi Arabia will once again align itself more closely with the United States，And in an election yearand subsequent yearsThe increase in oil supply，Sure.becomediscussedonepart。

oil priceThe rise is not just due to geopolitics。originaloil priceAs the grid starts to fall back，BondmarketThere was a crash.，The reason is that investors have digested the stance that the Federal Reserve will maintain higher interest rates for a longer period of time。City Index AdvancedmarketAnalyst Fiona Cincotta said，whenoil priceWhen falling，It's hard to find support，So there isoneThe possibility of falling。“marketThe narrative has changed.，Now very much focused on demand "，She says。

marketObservers should know，Daily fluctuations should not be over-interpreted，Especially commodities like oil。But when investors are so extreme，It's hard not to.。oil priceThe link to bond yields is also important。The past two days，existoil priceWhen falling，Bond yields fell slightly。The scenario of surging demand is supported by rising US Treasury yields，All other things being equal，Rising Treasury yields suggest the economy is strengthening。Therefore，With bondsmarketsell-off，stoneoil priceGrid has gone up。

According to Citigroup strategist Alex Saunders，And it's very simple.：oil pricePeak = interest rate peak。They wrote，“oil priceA sharp increase in the price of bonds is usually accompanied by a sell-off in bonds，This trend moderated at its peak. "。

Cincotta also mentioned the impact of a stronger dollar。oneAn index reflecting the strength of the dollar is approaching its highest level since November last year。Since oil is priced in dollars，A stronger dollar tends to hold downoil price，And vice versa.。For many countries around the world，When their currency depreciated against the dollar，This also tends to amplify the originaloil priceThe impact of the surge。Cincotta says，"This makes theoil priceVery expensive.。There are many factors supportingoil pricefall，onlyoneThe real upside support comes from tight supply "。