On Thursday afternoon, after the domestic market closed, oil prices began a smooth correction, completely erasing the previous day's gains before the night session opened. Following a rebound over the past two trading days driven by hype over the cold wave, market sentiment has noticeably cooled. Trump stated that if Iran wants to talk, then talks can proceed. Additionally, US Energy Secretary Wright called on American oil companies to innovate and reduce costs, emphasizing the need to more than double global oil production. The weekly data released by the EIA showed that US crude oil, gasoline, and diesel inventories all increased more than expected, highlighting the pressure from the supply glut that has curbed investors' enthusiasm for chasing gains. With a lack of speculative themes, oil prices have lost their upward momentum, making it difficult to break through to higher levels.
However, it is worth noting that while crude oil's performance remains very sluggish, capital has clearly begun to show higher expectations for petrochemical industry products. Both the stock market and futures market have seen consecutive sessions of increased positions and联动大涨 (lián dòng dà zhǎng /联动大涨). Synthetic rubber, for instance,一度 (yī dù / once) surged towards the daily limit during the night session following news of a 20% year-on-year decline in December production. Other petrochemicals like PTA also experienced significant surges, completely disregarding the decline in upstream crude oil prices. This performance indicates, on one hand, that the petrochemical industry is indeed experiencing a profit recovery, with supply and demand fundamentals for some products being better than the supply glut pressure facing the upstream cost component, crude oil. On the other hand, against the backdrop of continued downward pressure on oil prices, the rally in some petrochemical products appears overheated, and caution is advised when chasing highs.
On Thursday, the hype around the cold wave subsided, and geopolitical expectations eased, leading to a sharp drop in oil prices that completely erased the previous trading day's gains. This suggests that oil prices will continue to face downward pressure. For most of January, geopolitical factors have played the leading role, while the pressure from the supply glut has not formed a sustained driving force. Attention should now turn to whether oil prices will consequently break below the lower support level of the recent trading range. Of course, geopolitical risks have only cooled, not completely exited the market. The outlook for future price movements remains significantly uncertain, prone to sudden bouts of high volatility. In terms of trading strategy, it is still recommended to focus on seizing selling opportunities after price rallies. At the current stage, prioritizing risk management is paramount, followed by the pursuit of opportunities.
WTI crude oil futures fell by $1.26, or 2.08%, to settle at $59.36 per barrel; Brent crude oil futures fell by $1.19, or 1.84%, to settle at $63.34 per barrel; INE crude oil futures fell by 2.17%, closing at 436.6 yuan.
The US dollar index fell by 0.49% to 98.29; the Hong Kong Exchange's USD/CNY rate rose by 0.04% to 6.9404; the US ten-year Treasury yield was unchanged at 111.7; the Dow Jones Industrial Average rose by 0.63% to 49,384.01.
Venezuela plans to push for oil reforms, aiming to further open the sector to private capital and reduce tax burdens. The Venezuelan National Assembly is scheduled to discuss the oil reform plan on Thursday. If implemented, this plan would break the state's monopoly on the oil industry, allowing private companies to exploit and sell the country's abundant crude oil reserves. Previously, Acting President Rodriguez announced on January 15th the intention to reform the landmark Hydrocarbons Law, but did not provide details. The proposed amendments to the law would relax the role of the state-owned company PDVSA, granting private enterprises greater freedom in oil extraction and sales while reducing their tax burden. According to four informed sources, the reform plan would also allow companies to resolve legal disputes through international arbitration procedures instead of local courts. Oil royalty fees would be reduced from 33% to 20%, and the income tax rate would drop from 50% to 30%.
US Energy Secretary Wright: We need to more than double global oil production to meet growing demand and avoid energy poverty. The US oil industry must innovate to reduce costs. [I] will travel to Venezuela in the coming weeks; the United States will not provide security guarantees in Venezuela.
Trump's tariff remarks have sparked market concerns, injecting new momentum into efforts to promote global trade outside the US at this week's World Economic Forum in Davos. The frustration among many of America's major trading partners is palpable. The Canadian Finance Minister stated that the pace, scale, and scope of change are unsettling the world. He noted that what CEOs crave most currently is stability, predictability, and the rule of law, but these elements are in short supply. This is prompting countries to diversify their commercial relationships and take more action at the regional level to enhance economic resilience to trade policy shocks. Real changes are already occurring. Data shows that German exports to the US fell by 9% in the first 11 months of 2025. A head of a German trade association直言 (zhí yán /直言 bluntly stated) that Trump's tariff rhetoric is sawing off the branch he is sitting on. Tariffs on raw materials like steel are making it more expensive for companies to build industrial capacity in the US. A forecast by Boston Consulting Group paints a picture of the future: by 2034, the US share of global merchandise trade could drop from 12% to 9%. Its core model suggests global trade will be dominated by four nodes: the US, China, non-China BRICS+ countries, and a "plurilateral" bloc consisting of Europe, Canada, Japan, and others. Actual trade flows have already adjusted significantly. Taking the Port of Long Beach in the US as an example, its trade share with China has dropped from 70% in 2019 to 60% last year, with the difference being filled by other regions like Southeast Asia. The CEO of Europe's largest port, Rotterdam,坦言 (tǎn yán /坦言 admitted) that old dependency models are breaking down, and Europe must reconfigure itself quickly. The Director-General of the WTO supports this, believing that supply chain diversification helps spread jobs and growth to other countries.
The CEO of Saudi Aramco, the world's largest oil producer, Nasser, stated at Davos on Thursday that market predictions of a global oil supply glut are grossly exaggerated, as demand growth remains robust and global oil inventories are at multi-year lows. He pointed out that oil demand growth in emerging economies remains strong, followed by China and the US. Last year, global total demand reached a record high and will continue to grow this year. Meanwhile, global oil inventories are at the low end of the five-year average range, with floating storage mostly consisting of sanctioned crude. Furthermore, global oil spare capacity is currently only 2.5%, below the minimum threshold of at least 3% required to maintain market stability. Nasser warned that if the OPEC+ alliance further relaxes production cuts, spare capacity will decline further, necessitating high vigilance. This statement directly counters prevailing market analysis views. Analysts had widely predicted that due to production growth from the US, OPEC+, and other producers, global oil supply would significantly exceed demand by 2026, leading to a drop in oil prices from the levels above $60 per barrel seen for most of 2025. Nasser's remarks highlight the potential risks of structural tightness in the oil market, rather than simple expectations of a surplus. Future OPEC+ policy moves and changes in inventory levels will be key factors influencing oil prices.