On Friday (June 21), in the early morning trading of the Asian market, the US crude oil August futures contract fluctuated narrowly, currently trading at $81.23 per barrel. Crude oil futures climbed on Thursday, after the US Energy Information Agency (EIA) reported a decrease in crude oil inventories and data showed a cooling job market, boosting hopes that the Federal Reserve will cut interest rates early.

The Brent crude oil futures main contract rose 0.37% on Thursday to $84.80 per barrel. Earlier, it hit $85.814, the highest since May 1st. The July US crude oil futures due on Thursday rose $0.75, or 0.94%, to $82.32. The more active August futures contract reached a high of $81.52 per barrel on Thursday, closing at $81.24 per barrel, up approximately 0.76%.

Price Futures Group analyst Phil Flynn said, "The market is definitely rebounding."

The EIA stated that in the week ending June 14th, crude oil inventories decreased by 2.5 million barrels to 457.1 million barrels, with a survey showing analysts expecting a decrease of 2.2 million barrels. In addition, the US EIA gasoline inventory decreased by 2.28 million barrels in the week ending June 14, the largest decrease since the week ending March 29, 2024; The US EIA refined oil inventory decreased by 1.726 million barrels in the week ending June 14, the largest decrease since the week ending April 12, 2024.

The EIA stated that inventory at the US crude oil futures delivery center in Cushing, Oklahoma increased by 307000 barrels.

On Wednesday, US crude oil was not settled as it coincided with a US public holiday, resulting in overall suppressed trading.

Last week, the number of initial jobless claims in the United States decreased. But the number of people continuing to receive unemployment benefits is the highest since January, which is a sign that the US job market continues to cool.

In addition, another data released by the US Department of Commerce shows that the housing market is still struggling under the heavy pressure of high interest rates implemented by the Federal Reserve. In May, both housing starts and construction permits decreased to the lowest level in about four years.

Specific data shows that in the week ending June 8th, the seasonally adjusted number of people renewing unemployment benefits increased to 1.828 million, the highest since January.

In May, construction permits decreased by 3.8%, the lowest since June 2020, similar to the operating rate. The number of applications for single family residential permits decreased by 2.9% to 949000 households, the lowest in nearly a year.

As the Federal Reserve tightens its policies to combat inflation, the labor market momentum follows the overall economic trend of softening. With the easing of labor market pressure, there is still a possibility of interest rate cuts this year. If the Federal Reserve cuts interest rates, it will help boost the growth of crude oil demand, which is expected to provide support for oil prices.

Comerica Chief Economist Bill Adams said, "The economic indicators for the second quarter basically indicate that economic activity will slow down again. Weak economic activity and labor market data have strengthened expectations that the Federal Reserve will start cutting interest rates in a few months... The Federal Reserve will cut interest rates for the first time in September and again in December."

The Bank of England held its benchmark interest rate at a 16-year high of 5.25% on Thursday, but some decision-makers have stated that their decision not to cut rates is now a "delicate balance". The UK will hold a general election on July 4th.

Investors still need to continue to pay attention to news related to the geopolitical situation in the Middle East. Recent market concerns about the spread of war in the Middle East have also provided some upward momentum for oil prices.

On the evening of June 20th local time, the Israeli Defense Forces issued a notice stating that Israeli fighter jets had carried out airstrikes on multiple locations in southern Lebanon, including Hula and Talusa, earlier that day. The announcement shows that the Israeli military has identified these targets as Hezbollah's arsenal and "military infrastructure", and has also carried out shelling in multiple areas of southern Lebanon. At present, there is no response from the Lebanese side.

On the afternoon of June 20th local time, the Israeli Defense Forces issued a notice stating that they had killed a Hezbollah commander in an airstrike launched earlier that day in the Jouaiyya area of southern Lebanon. The notice states that the commander, named Abbas Ibrahim, is responsible for the military operation planning and command of Hezbollah armed personnel in the Juaiya region. The notice also stated that the Israeli Air Force conducted airstrikes on some of Hezbollah's anti-aircraft missile positions in southern Lebanon on the same day and will continue to carry out combat missions against Lebanon. On that day, Hezbollah in Lebanon announced the death of a member named Abbas Ibrahim Hamada, without mentioning specific information such as the member's position.

ActivTrades analyst Ricardo Evangelista said that the rising geopolitical risk premium caused by the Middle East conflict may also continue to support oil prices. The Israeli army attacked the central region of the Gaza Strip overnight, while tanks penetrated into the southern Rafah area.

On this trading day, investors need to pay attention to the performance of June PMI data in European and American countries, as well as the annualized total sales of completed homes in the United States in May and changes in drilling data in the United States.