On Wednesday (July 3rd), in the early trading session of the Asian market, international oil prices fluctuated slightly, with US crude oil currently trading around $82.98 per barrel. Brent crude oil futures and US crude oil futures rose and fell on Tuesday, rebounding from their two month high and closing slightly lower. Concerns about supply disruptions caused by Hurricane Beryl gradually eased. Despite a significant decline in API inventories, the unexpected increase in API gasoline inventories came at the peak of demand

Brent crude oil futures closed down $0.36, or 0.42%, on Tuesday at a settlement price of $86.24 per barrel. US crude oil futures settled at $82.81 per barrel on Tuesday, down $0.57, or 0.68%.

Earlier, US crude oil rose by $1, touching $84.38 per barrel due to concerns that Beryl may have a broader impact on the US regulated offshore oil producing areas in the northern Gulf of Mexico, while US demand for automotive fuel is increasing.

Both major indicators rose by about 2% on Monday.

Price Futures Group analyst Phil Flynn said that with new forecasts on Monday, traders have reduced their concerns about supply issues.

"The market recognizes that Beryl will not lead to any large-scale interruption in offshore oil production," Flynn said. We may see some production shutdowns, but the impact on the platform is minimal“

Hurricane Beryl, currently classified as a Category 5 hurricane, is raging in the Caribbean Sea. According to the National Hurricane Center in the United States, Beryl is expected to weaken into a tropical storm when it enters the Gulf of Mexico later this week.

With the arrival of Thursday's Independence Day holiday, it is expected that US gasoline demand will peak this week. The American Automobile Association (AAA) predicts that travel during holidays will increase by 5.2% compared to 2023, with car travel expected to increase by 4.8%.

The latest data from API shows that API crude oil inventories decreased by 9.163 million barrels last week, far exceeding market expectations of a decrease of 150000 barrels. However, API gasoline inventories unexpectedly increased by 2.468 million barrels, with market expectations of a decrease of 1.5 million barrels.

The official EIA crude oil inventory will be released at 22:30 Beijing time. A Reuters survey released on Tuesday showed that US crude oil and oil inventories were expected to decline last week.

Seven analysts surveyed by Reuters estimated that crude oil inventories decreased by an average of 700000 barrels in the week ending June 28th.

EIA stated that crude oil inventories increased by 3.6 million barrels to 460.7 million barrels in the week ending June 21, when analysts expected a decrease of 2.9 million barrels.

According to analysts' estimates, EIA gasoline inventories decreased by about 1.3 million barrels last week, while distillate storage, including diesel and heating oil, will decrease by about 1.2 million barrels.

The survey shows that the utilization rate of refinery capacity has increased by 0.7 percentage points compared to the previous week's 92.2%.

In terms of positive news, Federal Reserve Chairman Powell's latest speech leans towards the dovish side, raising expectations for the Fed's September interest rate cut and favoring the outlook for crude oil demand.

Federal Reserve Chairman Powell said on Tuesday that the United States is returning to a "downward trajectory of inflation", but decision-makers need more data to verify whether the recent decline in inflation rates accurately reflects the economic situation before lowering interest rates. "I believe that the previous data... as well as the previous data, to some extent indicate that we are returning to the track of declining inflation," Powell said. "Before we begin to... relax policies, we want to be more confident that the inflation rate is continuing to decline to 2%." Powell declined to comment on when the United States may start cutting interest rates, but acknowledged that the Federal Reserve has entered a sensitive stage of policy review, and the risks faced by inflation and employment goals are "closer to balance," which means that neither can be given full priority when formulating policies. ".

Chicago Fed Chairman Goolsby said he saw some "warning signs" of economic weakness and stated that the Fed's goal is to reduce inflation without putting pressure on the labor market.

According to calculations by the London Stock Exchange Group (LSEG), the likelihood of a September rate cut digested by the US interest rate futures market has increased from approximately 63% on Monday to 69%, following the JOLTS report and Powell's speech.

In terms of geopolitical situation, relatively speaking, the market's concern about the geopolitical situation has cooled down, and the pressure of short-term oil price correction has increased.

During a meeting with the Ukrainian Defense Secretary at the Pentagon, US Defense Secretary Austin said that the United States will soon announce over $2.3 billion in new security assistance to Ukraine. Austin said that the latest weapons program provided to Ukraine will include weapons such as anti tank weapons and air defense interceptors, and will allow for accelerated procurement of NASAMS and Patriot air defense interception systems.

On July 2nd local time, Hungarian Prime Minister Orban visited Ukraine. This is the first time that Orban has visited Russia-Ukraine conflict since the outbreak of the Russian Ukrainian conflict. Orban suggested that Ukraine reconsider its previous decision and accept a temporary ceasefire to advance the peace talks with Russia.

On July 3, Agence France Presse reported that the French Presidential Office issued a statement stating that French President Macron had a phone call with Israeli Prime Minister Netanyahu on July 2, urging him to prevent the outbreak of conflict between Israel and Hezbollah in Lebanon. According to the report, the French Presidential Office stated in a statement that Macron "reiterated his serious concern over the escalating tension between Hezbollah and Israel" during the phone call, and mentioned that "it is absolutely necessary to prevent a conflict that would harm the interests of Lebanon and Israel.".

In terms of technology, according to the daily chart, US crude oil encountered resistance near the over two month high hit on April 26th and then fell back. The long upward shadow on the K-line and KDJ's high dead cross operation have significantly increased the risk of peaking and pullback pressure on oil prices in the short term. Oil prices may confirm a retracement of the 100 day moving average of 80.30. In addition, there is also some support around the 5-day moving average of 82.56 and the 10 day moving average of 81.80 below, with last Friday's low support around 80.97.

Preliminary resistance above refers to the position near 83.65, while strong resistance continues to focus on the high point of 84.46 on April 26th. If this resistance can be overcome, it will increase the bullish signal in the future.

The minutes of the Federal Reserve meeting will be released on this trading day, and investors need to pay close attention. In addition, the US June ADP employment data, US June ISM non manufacturing PMI, and US May factory order month rate will be released on this trading day. Investors need to pay attention to them. In addition, they need to pay attention to the speeches of Federal Reserve officials and news related to the geopolitical situation.

However, as July 4th is the Independence Day holiday in the United States, the market will be closed early this trading day, which may slightly limit trading space. Investors need to be cautious. The changes in the number of initial jobless claims in the United States, originally scheduled to be announced every Thursday, will be announced one trading day earlier this week until Wednesday.