On July 29, the U.S. WTI crude oil futures market prices rose, with the settlement price of main contracts at $41.27/barrel, up $0.23. Brent crude oil futures market prices rose, with the settlement price of main contracts at $43.09/barrel, up $0.48. Oil prices rose mainly due to the largest drop in US crude oil inventories in the year, but the surge in global epidemic cases limited the rise in oil prices.

U.S. crude oil inventories fell sharply last week, the largest weekly decline since the end of December 2019, according to a report released by the U.S. Energy Information Agency (EIA) on Wednesday. Data showed that U.S. crude oil inventories fell 10.6 million barrels to 525.97 million barrels in the week ending July 24, and analysts had expected an increase of 357000 barrels. The decline in inventories is said to be due to a drop in net US crude oil imports by 1 million barrels a day to 1.9 million barrels a day. This is mainly due to the direct impact of OPEC + over scale production reduction. The favorable inventory brought a boost to the oil market, and the oil price rose slightly in the current atmosphere under the pressure of the epidemic situation.

Although U.S. crude oil inventories declined significantly, distillate and gasoline inventories increased. U.S. gasoline inventories rose by 654000 barrels to 247.39 million barrels in the week of 24, after analysts surveyed had expected a decrease of 700000 barrels. Distillate stocks, including diesel and heating oil, rose 503000 barrels to 178.39 million barrels, the highest level since December 1982; analysts had expected a decrease of 300000 barrels. The market is generally concerned about the rise of crude oil inventory and the weakening of the US dollar, which are favorable factors for oil price. However, the oil price did not rise significantly. The main reason is the impact of the slowdown in demand. As can be seen from the obvious increase in the stock of refined oil products, due to the impact of the epidemic, many states in the United States once again took some restrictive measures. Now it is the peak driving season in the United States, but according to the gasoline inventory data, the peak season table is as follows The increase in gasoline inventory indicates that the demand for driving is not as good as that in the same period of previous years. According to the news, many people are still working at home, which may make it difficult to get rid of the short-term downturn in crude oil demand.

In the view of business associations, it is difficult to see a fundamental improvement in fuel demand under the background of still severe epidemic situation. Although the United States and Europe have recently introduced economic stimulus policies, most of them are monetary policy solutions. Due to the particularity of the epidemic situation, it is difficult to solve the problem from the perspective of increasing money supply. At present, the rebalancing of market supply and demand is mainly due to the efforts of oil producing countries to limit production. However, according to the previous agreement reached by OPEC +, the record production reduction will end in July. If OPEC + reduces the share of production reduction, it may further break the current balance of the oil market and increase the pressure on demand. Naturally, it will bring great pressure on the oil price, and there is also a downward risk of oil price.