On Monday (November 18th), US crude oil rebounded slightly during the Asian trading session, trading around $67.05 per barrel, while on Friday it fell sharply, supported by breaking through the box level,

And the weekly closing line formed a bearish candlestick, marking the largest weekly decline in nearly a month. Short sentiment is expected to further ferment, and the possibility of downward acceleration cannot be ruled out.

Although the geopolitical situation has heated up on a fundamental level, its impact on oil prices is limited, mainly due to the continued decline in global demand expectations, which is an important factor limiting the rebound of oil prices.

Last week, EIA inventory also increased, which was unfavorable for the rebound of oil prices on the supply side.

According to CFTC data, the net long position of crude oil speculators decreased by 21944 lots to 71587 lots, reflecting a cooling of market expectations for an increase in crude oil prices.

Russian refineries cut production due to losses, closure imminent

According to five industry insiders, due to export restrictions, rising crude oil prices, and high borrowing costs, at least three refineries in Russia have had to stop processing or reduce production due to severe losses.

The closure of these refineries highlights the predicament of the Russian refining industry, which has been plagued by Ukrainian drone attacks, Western sanctions against Russia (forcing refineries to sell fuel at discounted prices), and high interest rates,

Five sources who work in refinery operating companies and are familiar with the financial situation of refineries said that in recent months, Tuapse, Ilsky, and Novoshakhtinsky refineries have suspended or reduced production.

There have been no relevant reports before. Two sources said that Russia's least technologically advanced refineries have been hit the hardest, as they do not produce high-quality fuel and will suffer losses of up to 10000 rubles per ton ($102 per ton) in the second half of 2024.

Sources say that some refineries with more complex technologies have also experienced slight losses; However, some other refineries have made slight profits due to steady sales of light fuels.

Sources say that due to meager profits, Russia's largest oil company, Rosneft ROSN, has had to suspend its refining operations at the relatively technologically backward Tuapse refinery in the Black Sea multiple times this year.

According to four industry insiders, due to weak profits, smaller independent refineries Ilsky and Novoshakhtinsky in southern Russia have been operating at half of their indicated capacity for several months, with processing volumes of approximately 70000 barrels per day and 60000 barrels per day, respectively.

These sources added that all three refineries were attacked by Ukrainian drones earlier this year, which is also one of the reasons for the low processing volume.

International Atomic Energy Agency: Ukraine's energy infrastructure has been heavily bombed by Russian military, and several substations of Ukrainian nuclear power plants that rely on external power supply have been damaged

On November 17th local time, the Director General of the International Atomic Energy Agency, Grossi, issued a statement stating that Ukraine's energy infrastructure was hit by a large-scale Russian airstrike that day, and several substations of Ukrainian nuclear power plants that rely on external power supply were damaged.

That morning, the nuclear power plant in operation in Ukraine took preventive measures to reduce electricity production. The statement states that currently only 2 out of the 9 operating reactors in Ukraine are generating electricity at 100% capacity.

Grossi stated that the International Atomic Energy Agency team visited seven substations located at nuclear power plants throughout Ukraine in September and October to assess the losses caused by the Russian attack,

And it will evaluate whether the International Atomic Energy Agency team needs to conduct more visits after the Russian attack on the 17th of this month.

Biden's policy on the Russia-Ukraine conflict has been greatly reversed, allowing Ukraine to use US weapons to attack Russia's hinterland

Two US officials and a source familiar with the situation said on Sunday that President Biden's government has allowed Ukraine to use US made weapons to attack Russia's hinterland, which is a major reversal of Washington's policy in the Russia-Ukraine conflict.

Sources said that Ukraine plans to conduct its first long-range strike in the coming days, but they did not disclose details due to operational security concerns.

There are still two months left until President elect Trump takes office on January 20th. Previously, Ukrainian President Zelensky had been requesting permission for the Ukrainian military to use American weapons to strike military targets in the Russian hinterland for several months.

A US official and a source familiar with the decision said that this change is mainly in response to Russia's deployment of North Korean ground forces to supplement its own forces, and this development has raised concerns in Washington and Kiev.

Zelensky said in his evening speech that these missiles "will explain everything. He said, "Today, many media outlets are saying that we have been allowed to take appropriate action. But the crackdown is not done with words. Such things are not publicly announced

Russia warns that relaxing restrictions on the use of US weapons in Ukraine will be seen as a significant escalation of the situation. According to TASS, Vladimir Dzhabarov, First Vice Chairman of the International Affairs Committee of the Russian Federation Council, said,

The decision by Washington to allow Ukraine to use American long-range missiles to strike Russia's hinterland could lead to World War III and will receive a swift response.

Alex Plitsas, a non resident senior fellow at the Atlantic Council, a think tank in the United States, said, "Removing target restrictions will enable Ukrainians to no longer fight without restraint.

However, like anything else, I believe history will prove that this decision came too late. Just like ATACMS, HIMARS, Bradley Fighting Vehicle, Abrams Stark, and F-16. They all need to come earlier

On a technical level, the daily moving average of US crude oil has turned downwards, and the KDJ indicator has not shown signs of oversold. The probability of a downward trend in intraday structure is relatively high, and if it falls below $66, there is a possibility of downward acceleration.

Daily chart of US crude oil