How Long Can Oil Prices Hold Up in the Middle East Crisis

In Asia on Wednesday (September 25), oil prices shook narrowly at eight-day lows. The U.S. stock market fell as investors fled risky assets such as crude oil and other commodities, hit by political turmoil in the United States. But the geopolitical chaos in the Middle East, coupled with market doubts about the recovery of Saudi Arabia's production capacity, still supports oil prices to a certain extent. Data, note the changes in EIA crude oil inventories at night, API crude oil inventories unexpectedly increased by 138 million barrels in the morning, making oil prices lower in the short term.

Trump was impeached and the economic outlook was poor. U.S. stocks fell the biggest decline in a month. The US stock market fell, and the S & P 500 index hit its biggest monthly decline in, hit by the US political turmoil. Reported that the speaker of the house of Representatives Nancy Pelosi will announce a formal impeachment investigation of US President Trump. With the announcement of a call to Ukraine tomorrow by Trump, the stock market has narrowed its decline. In addition, many other factors also depressed the stock market. Facebook, Amazon, apple, Nai Fei and Alphabet Inc.'s FAANG plate were down, and the negative remarks made before the UN General Assembly and the weakening of consumer confidence in the United States exacerbated the gloom.

Consumers'assessment of the current situation is not so optimistic, and their expectations of short-term prospects are also weakened. Trade tensions seem to upset consumers. However, the pattern of uncertainty and volatility seems to have existed many times this year. Although consumer confidence may continue to hover near current levels in the coming months, to some extent, this continuing uncertainty will begin to undermine consumer confidence in economic expansion.

Ended Tuesday's close, the S & P 500 index fell 0.8%, at 2966.60 points, the Nasdaq 100 index fell 1.4%, reported 7993.63 points, the Dow Jones Industrial Average fell 0.5%, reported 26807.77 points.

Oil price tends to be positively correlated with the stock market, as falling stock prices will lead to a downturn in the economic outlook, thus weakening the optimistic outlook for crude oil demand and depressing oil prices.

Focus on the impact of EIA data on oil prices

In the early morning, data released by the American Petroleum Association (API) showed that API crude oil stocks in the United States increased by 1.38 million barrels unexpectedly in the week ending September 20, with an expected decrease of 768,000 barrels. In addition, gasoline stocks increased by 1.95 million barrels and refined oil stocks decreased by 2.25 million barrels. After the release of the data, the U.S. oil short-term rapid decline.

Well-known financial blog Zero Hedging said that before API data were released, U.S. oil fell to a intraday low near $57. After API announced that U.S. crude oil inventories grew faster than expected, oil prices expanded their decline in the short term. Joe McMonigle, an analyst at Hedgeye Risk Management, said that the market was too optimistic about Saudi Arabia's capacity recovery at the moment, and I don't think Saudi Arabia will be able to fully restore its capacity before the attack by the end of the year