01, Crude Oil Deep V Rebound

Last night, international crude oil prices experienced a deep V-shaped rebound.

During the European trading session yesterday afternoon, oil prices plummeted rapidly, with WTI crude oil prices falling from $85 to a low of $81.73.

However, in the late night, crude oil prices suddenly surged straight up, quickly returning above $85, and ultimately closed at $85.35.

At the same time, Brent crude oil prices also rose by $0.66, a gain of 0.7%, returning above $92.

02, Supply Reduction

The continuous decline in crude oil prices in recent days should be related to the upcoming interest rate hike by the US dollar, and the US dollar index has a further strengthening trend, because international crude oil prices are priced in US dollars, and a strong US dollar is a powerful suppression for oil prices.

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Last Thursday, crude oil prices also experienced a significant drop. At that time, WTI crude oil prices were still above $89, but closed at $85.

However, the current lowest oil price has not yet broken through the $81.2 during the trading session on September 8.

And last night's sharp rebound is estimated to be related to the release of OPEC's production data.In July, OPEC faced a daily shortfall of approximately 2.9 million barrels, and in August, production was nearly 3.6 million barrels below target. Although OPEC has repeatedly claimed that it would slightly increase production, the actual capacity growth is constrained by production facilities and cannot be rapidly increased.

Of course, the more fundamental reason lies in the fact that oil-producing countries do not have a strong willingness to increase production. After all, an increase in production would lower oil prices, which would be counterproductive for oil-producing countries.

Therefore, when there was an opportunity to sign an agreement with Iran recently, OPEC had already hinted in advance that, given that Iranian oil would return to the global crude oil market, OPEC would reduce production.

However, the negotiations are currently at an impasse, but OPEC has not mentioned its willingness to increase production as a result.

Bank of America expects that the average price of Brent crude oil next year may be around $100, and the average price of U.S. light crude oil futures will remain around $95. It seems that the possibility of a significant drop in crude oil prices is not high.

03, U.S. stocks stop falling

In addition to the slight rebound in international crude oil prices in the commodity market, the U.S. stock market has also seen a halt in the decline and rebounded.

The three major indices all rose slightly, but the increase was minor, with the increase of the three major indices ranging from 0.6% to 0.8%, which has little impact on the overall decline of the entire 2022 year.

The temporary stabilization of the U.S. stock market should be waiting for the final interest rate hike announcement from the Federal Reserve.

In the past month, the Nasdaq index has fallen from a high of 13,180 points to the current 11,530 points, a drop of 1,600 points.However, if the final interest rate hike is determined to be 75 basis points, then for the stock market, it may be a case of the shoe dropping, and the US stock market will stabilize and rebound in the future.

But once the Federal Reserve believes that future inflation is still difficult to curb and raises interest rates by 100 basis points, it would far exceed market expectations, and the US stock market will continue to decline.

But overall, since the interest rate hike in September is definitely not the last, the US stock index will still face greater pressure.

For A-shares, there will still be pressure from overseas stock markets in the future. But the trend of A-shares is more determined by the recovery of the domestic economy.