Will the oil be able to recover tomorrow?

Today, crude oil opened high and then declined, with a drop exceeding expectations. The reason is that futures haven’t fallen; instead, crude oil in the major A-shares market continues to decline, but futures haven’t driven the crude oil prices in the A-shares market. Currently, futures are still rising sharply, based on the logic that oil-producing countries are significantly cutting production. Iraq and other oil-producing countries are forced to reduce output due to the Strait of Hormuz blockade, with Iraq’s pre-war daily production dropping from about 4.3 million barrels to 1.7–1.8 million barrels. Given this situation, the logic remains valid. Oil and technology form a seesaw relationship: as oil retreats, the market pushes for computing power, with the logic of computing power being “Little Lobster OpenClaw.” Today, the bidding for Little Lobster didn’t perform well, while oil prices remained relatively steady. Oil bidding opened with four straight limit-ups, and the strongest was Intercontinental Oil & Gas, which opened with an order of 1.803 billion contracts. I expected it to open a limit-up, but I didn’t expect it to close so sharply. Many large funds entered during today’s limit-up. Looking at the order book during trading, I observed that the selling pressure mainly came from quant funds. Based on this, there’s a repair expectation for tomorrow, but it won’t be very high—after all, futures rose so much today without significantly boosting oil prices. [Taogu Ba]

Last time, I analyzed that “Chemical/Gas sectors are following oil.” Today, oil bidding was the strongest, so even if there is a pullback in oil, the probability of recovery is much higher than in the chemical/gas sectors. For example, today Blue Flame Holdings and Jinniu Chemical showed strong performance but still received negative feedback. The shipping sector, represented by COSCO Shipping South China, is even less optimistic. Today, China National Offshore Oil Corporation (CNOOC) was relatively strong within the oil sector, so tomorrow oil prices can be anchored to CNOOC.

The outlook for Little Lobster OpenClaw isn’t very high either, as the speculative logic still mainly revolves around computing power. Today, computing power and indices resonated for recovery, and there might be some upward movement tomorrow, but continuation looks uncertain because this isn’t the ideal timing for us. Recently, the market’s strength has been in the smart grid and power sectors, driven by the opportunity in new energy due to the rise in traditional energy prices. Power has already hit new highs. If we bet on this direction, once the sector shows its first divergence, we can try to buy core stocks at low levels—these are stocks that combine both computing power and power attributes. Currently, there are no clear new hotspots in the market; it’s still rotating from oil to power. Power has been strong for four consecutive days and is getting closer to divergence. Overall, the market hasn’t shown negative feedback, so if you’re looking for a high-probability opportunity, you still need to wait for the market to present a new direction.

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