1.16 Crude Oil Outlook

As geopolitical relations slightly ease, the situation quickly reverts to its original state. The core principle remains a loose supply and demand pattern. US crude oil inventories have rebounded, and recent geopolitical conflicts have not had a significant impact on oil supply. Additionally, recent market expectations and poor economic data have led to an overall weak demand outlook. Therefore, there is no support for crude oil to sustain a rebound. After rising to around 62, it sharply declined, forming a long upper shadow, which is a sign of a potential top in the short term. In terms of trading strategy, continue to maintain a stance of shorting on rebounds. We are optimistic that crude oil will continue to decline in the next phase.