【MACRO Alert】Behind the price fluctuations in the crude oil market : the reshaping of the market str

During the early Asian trading session on March 6, Brent crude oil futures prices showed an upward trend, but the overall price has not yet broken through the key mark of $70 per barrel. Specifically, the price of the May contract of Brent crude oil was $69.68 per barrel, up 38 cents per barrel from the settlement price on March 5; the price of the April contract of WTI crude oil was $66.69 per barrel, also up 38 cents per barrel from the settlement price of the previous day. However, it is worth noting that on March 5, oil prices fell to their lowest level since September 2024, mainly due to the continued trade frictions that put pressure on crude oil demand, and the expectation that OPEC+ plans to increase supply also had an impact on market sentiment.

In terms of inventory data, the U.S. Energy Information Administration (EIA) released a report on March 5, saying that as of the week of February 28, U.S. crude oil inventories increased by 3.6 million barrels, reaching a seven-month high of 433.8 million barrels. Except for the West Coast, crude oil inventories in all regions of the United States increased. The increase in inventory data further highlights the current situation of relatively sufficient supply in the crude oil market, and also has a certain suppressive effect on oil prices.

Alberta, Canada, as an oil-rich region, originally hoped to increase energy exports to the United States, but due to the trade dispute caused by US President Trump, the province had to slow down the pace of more cross-border oil pipeline projects and seek other export directions. Alberta Premier Danielle Smith made it clear on March 5 that before the United States returns to rationality, the province will focus its energy and funds on exporting one of the world's largest oil and gas reserves to other places.

In addition, Canadian Foreign Minister Melanie Joly also said at the Toronto Regional Trade Council on March 5 that if the situation escalates, Canada can choose to restrict the flow of natural resources to the United States or increase their prices, and the United States is well aware of this. The adjustment of export strategies caused by this trade dispute will undoubtedly have a profound impact on the flow of crude oil and the market supply pattern in North America. The market uncertainty caused by international trade disputes has also made Chinese oil companies cautious about taking advantage of low oil prices to increase purchases.

This week, Trump imposed a 25% tariff on goods from Mexico and Canada. Although Canadian crude oil was exempted from the 10% tariff, Mexican crude oil is still subject to a 25% tariff. Against this backdrop, Mexico is actively seeking alternative markets for crude oil. According to senior Mexican government officials, Pemex is negotiating with potential buyers in Asia (including China) and Europe. Last year, Pemex exported 806,000 barrels per day of crude oil, 57% of which was shipped to the United States, but in January this year, its crude oil exports plummeted 44% year-on-year to 532,404 barrels per day, the lowest level in decades.

According to Kpler data, although Mexico exports some crude oil to Europe and Asia (especially India and South Korea), most of the exports of its flagship product, heavy sour Maya crude oil, still go to its neighboring United States. However, Pemex is currently communicating with potential new buyers in non-US markets. Potential Chinese buyers have shown "strong interest" in preliminary communications, and there is a certain demand for Mexican crude oil in Europe, India and Asia.

On March 5, the Organization of Petroleum Exporting Countries (OPEC) and its allies, OPEC+, decided to increase its oil production by 138,000 barrels per day in April as planned, the first increase since 2022. This decision has further strengthened the market's expectations for increased crude oil supply, exerting downward pressure on oil prices. At the same time, market sources cited data from the American Petroleum Institute (API) saying that as of the week ending February 28, U.S. crude oil and gasoline inventories fell, while distillate inventories rose, but investors are more concerned about the U.S. inventory data to be released by the government on Wednesday to obtain more accurate market supply and demand information.

Overall, the current international crude oil market is facing the intertwined influence of multiple factors. On the one hand, OPEC+'s production increase plan and the increase in US crude oil inventories have gradually exposed the pressure on the market supply side, constraining the rise in oil prices; on the other hand, the market uncertainty caused by international trade disputes has made global economic growth face downward risks, which in turn affects oil demand, which also has a negative impact on oil prices.