With the changes in the international oil market, crude oil futures finally rebounded on Wednesday (July 31st) after experiencing a period of ups and downs. Brent crude oil and US West Texas Intermediate crude oil futures both rebounded more than $1 from their seven week lows, driven by escalating tensions in the Middle East and continued market concerns about demand.

Geopolitical factors: Rising tensions in the Middle East

The assassination of Hamas leader Haniyeh in Iran undoubtedly adds fuel to the tense situation in the Middle East. The occurrence of this event not only intensified the possibility of regional conflicts, but also had a direct impact on the international oil market.

Renowned institutional analyst Tony Sycamore pointed out that "all these events combined will definitely increase the possibility of escalation in the Middle East situation." Geopolitical uncertainty has always been an important factor affecting oil prices, and the current tense situation undoubtedly brings more uncertainty to the market.

Technical Analysis: Technical Interpretation of Oil Price Rebound

From a technical analysis perspective, although oil prices rebounded on Wednesday, the overall trend is still suppressed by demand concerns. The decline in Brent crude oil and US crude oil futures in July indicates market concerns about the sustainability of the OPEC+production reduction agreement and future demand. Although the OPEC+Supervisory Committee is unlikely to make any changes to the current production reduction agreement this week, market expectations have already had an impact on oil prices.

Fundamental Analysis: Demand and OPEC+Production Reduction Agreement

The slowdown in fuel demand has put pressure on the oil market. However, sources from the OPEC+alliance of oil producing countries have revealed that despite the recent significant drop in oil prices, the supervisory committee is unlikely to make adjustments to the current production reduction agreement this week. This decision has to some extent stabilized market sentiment, but at the same time reflects the market's concerns about the demand outlook.

Message side: Impact of EIA inventory data

The upcoming oil inventory data released by the US Energy Information Administration (EIA) will undoubtedly become a key factor affecting the short-term trend of oil prices. Market participants generally expect that this data will have an immediate impact on oil prices, especially in the current context of fragile market sentiment.