CITIC Futures: Oil supply remains tight, geopolitical outlook unclear

The prospects for Iran-U.S. negotiations remain uncertain, and the continued low traffic through the Strait of Hormuz is difficult to disprove for now, with oil supply remaining tight. Since March, global oil product inventories and offshore crude oil in transit have significantly decreased, while strategic petroleum reserves continue to be released. Against the backdrop of sustained low traffic through the Strait of Hormuz, the risk of a second price surge remains high, and even if the passage through the Strait of Hormuz is substantially eased, the recovery of Middle Eastern oil production may be slightly delayed. Additionally, with low product inventories, refinery procurement demand will clearly increase year-on-year, making it difficult for near-month futures prices to fall back to pre-conflict levels. During the phase of fluctuating geopolitical expectations, high volatility is expected. (CITIC Futures)