The probability of a deep drop in oil prices at the end of this month and July is high

On June 12th, CITIC Futures said that on the macro front, the euro zone has entered a technical recession, and macro demand is not good. The U.S. dollar weakened sharply, superimposed on the skyrocketing natural gas in Europe, and crude oil followed suit. However, the news of Iranian crude oil release hit again. Although the rumors were refuted, the sharp fluctuations in oil prices meant that under the background of weak demand, it was necessary to continue to deepen production cuts to support oil prices. The reason for Saudi Arabia’s large-scale production cuts is that the market cannot bear the increase in supply. As the country with the greatest potential for short-term supply release, Iran has become a major uncertain factor when Saudi Arabia rejects the US request to increase production, and it has also become a means for the US to put pressure on Saudi Arabia. Looking ahead, if the U.S. economy does not decline in July and Iranian crude oil does not return, then there is a high probability that $70/barrel will become the bottom of the year for U.S. oil. If the recession superimposes the return of Iranian crude oil, the probability of a deep drop in oil prices at the end of this month and July is high. In August, as the United States covers the SPR in a suitable position, oil prices will usher in a trend rebound.