On Monday (September 23), in the morning session of the Asian market, international oil prices fluctuated narrowly, with the main contract for US crude oil now trading around $71.25 per barrel. Oil prices narrowed last Friday, but rose for the second consecutive week on the weekly chart, thanks to US interest rate cuts and a decrease in US supply.

Brent crude oil futures closed down $0.39, or 0.52%, last Friday, settling at $74.49 per barrel. US crude oil futures closed down $0.03, or 0.4%, on Friday, settling at $71.92. The signs of economic slowdown in major Asian commodity consuming countries have limited crude oil prices. But both major indicators rose by more than 4% last week, and the weekly chart recorded two consecutive positive days.

Since Brent crude oil fell below $69 for the first time in nearly three years on September 10th, oil prices have rebounded.

Ole Hansen, head of commodity strategy at Shengbao Bank, said, "The market believes that levels below $70, coupled with hedge fund confidence in rising crude oil and fuel product prices at record lows, require an economic recession to be reasonable, and this week's significant interest rate cuts in the United States will help reduce this risk

Oil prices rose more than 1% last Thursday, following a significant 50 basis point rate cut by the Federal Reserve the day before.

Interest rate cuts typically promote economic activity and energy demand, but some analysts are concerned about the weakness of the US labor market.

Last week, US crude oil inventories fell to their lowest level in a year, providing more support for oil prices.

In August, refinery production in major Asian countries slowed down for the fifth consecutive month, and the growth rate of industrial output also dropped to the lowest level in five months.

The major Asian countries have also released the third and possibly final batch of fuel export quotas for this year, keeping the export volume consistent with the level in 2023. StoneX analyst Alex Hodes stated in a report last Friday, "This move indicates that the refinery's profit margins are too low to justify increased activity

Energy service company Baker Hughes stated in a closely watched report last Friday that US energy companies resumed cutting oil and gas drilling platforms last week after increasing the number of drilling platforms the previous week, with drilling platforms declining for the fifth week in six weeks.

As of the week ending September 20th, the number of oil and gas wells (an early indicator of future production) decreased by 2 to 588.

Baker Hughes said that this means the total number of drilling wells has decreased by 42 compared to the same period last year, a decrease of 7%.

Baker Hughes stated that the number of oil drilling platforms remained unchanged at 488 last week, while the number of natural gas drilling platforms decreased by 1 to 96.

Due to the decline in oil and gas prices, soaring inflation leading to increased labor and equipment costs, and companies focusing more on debt repayment and improving shareholder returns rather than increasing production, the number of oil and gas drilling wells decreased by about 20% in 2023 after increasing by 33% in 2022 and 67% in 2021.

After falling 11% in 2023, US natural gas futures have risen by about 0.6% so far in 2024, while US natural gas futures have fallen by about 4% so far in 2024 after plummeting 44% in 2023.

The CEO of EQT, the largest natural gas producer in the United States, believes that fuel prices will remain below $3 per million British thermal units in the short term.

EQT reduced production earlier this year due to prices falling to multi-year lows, and it is expected that demand for liquefied natural gas exports will ease next year. Several competitors in the US shale gas industry have also reduced their drilling volume to curb overproduction.

Two insiders said that the oil export volume of Novorossiysk, a Black Sea port in Russia, has increased by 140000 metric tons to 2.24 million tons, or 545000 barrels per day.

According to sources, this modification was made after adding 140000 tons of cargo to the loading plan.

Three grades of oil - Ural crude oil from Russia, Siberian light crude oil, and KEBCO crude oil from Kazakhstan - are loaded from the Novorossiysk port.

According to calculations, after adjusting the loading capacity of Novorossiysk, the overall oil loading plan for western Russian ports in September will increase to nearly 2.06 million barrels per day.

However, the escalation of the geopolitical situation in the Middle East has raised concerns in the market about a decrease in crude oil supply, continuing to provide support for oil prices.

Israel and Hezbollah engaged in a fierce exchange of fire last Sunday (September 22), with Israeli warplanes carrying out the most intense bombing of southern Lebanon in nearly a year, while Hezbollah launched rockets deep into northern Israel.

The Israeli military stated that it struck approximately 290 targets last Saturday (September 21), including thousands of Hezbollah rocket launchers, and stated that it will continue to strike Hezbollah targets.

Earlier last Sunday, Israel closed many areas in the north of the country and schools in the Israeli occupied Golan Heights, and restricted gatherings.

The military stated that most of the rockets and missiles launched from Lebanon and Iraq were intercepted by Israeli air defense systems.

Several buildings were hit, including a severely damaged house near the Israeli city of Haifa. The rescue team treated the injured, but there were no reports of death.

Hezbollah announced on Telegram earlier last Sunday that it had launched dozens of missiles at Ramat David Air Base in Israel in response to "multiple Israeli attacks on Lebanon".

Hezbollah launched a series of rocket attacks on Ramat David, calling it the most intense attack since the beginning of hostilities.

Iranian backed Iraqi militants also claimed in a statement earlier on Sunday that they launched an explosive attack on Israel using drones.

The region is on the brink of disaster, and it cannot be overemphasized that there is no military solution that can make either side safer, "said Jeanine Hennis Plasscharet, the United Nations Special Coordinator for Lebanon, in a post on X

Less than 48 hours before the escalation of the attack, Israel launched airstrikes on Hezbollah commanders in the suburbs of the Lebanese capital. The Lebanese Ministry of Health announced on Sunday that the death toll from the airstrike has risen to 45.

Hezbollah reported that 16 members, including senior leader Ibrahim Aqil and another commander Ahmed Wahbi, were killed in last Friday's airstrike.

The Israeli military claimed that they attacked the underground meetings of the leadership of Aqil and Hezbollah's elite unit Radwan, almost completely destroying the organization's military command system.

Hezbollah stated that it will continue to fight Israel until Israel agrees to a ceasefire in Gaza.

US officials say that this is unlikely to happen soon. Israel hopes that Hezbollah will cease fire and withdraw troops from the border areas, comply with the United Nations resolution signed in 2006, regardless of whether a Gaza agreement is reached.

Overall, the fundamental situation tends to support the continued volatility and upward trend of oil prices in the future. On this trading day, September manufacturing PMI data for Western countries such as the United States will also be released, and investors need to pay close attention.

Continuous daily chart of US crude oil