U.S. crude oil is "attacking and capturing territory" everywhere, with spot prices for crude oil falling from Europe to West Africa.

The new surge in U.S. oil exports has once again lowered the spot prices of crude oil from Europe to West Africa, providing a sigh of relief for consumers as the peak demand season is about to arrive.

Oil tanker tracking data compiled by Bloomberg shows that in the first 23 days of this month, the volume of oil transported to Europe will rebound to at least 2.1 million barrels per day, a one-third increase from the average flow in April.

This rebound coincides with the price of WTI Midland crude oil falling to its lowest level in over a year. WTI Midland crude oil is the dominant U.S. crude oil in the European market. Similarly, the main North Sea crude oil, Forties, also fell by nearly $1 per barrel within a week, and Forties is also included in the spot Brent crude oil pricing benchmark.

The buying and selling of physical crude oil supports the global crude oil futures market, such as Brent and WTI crude oils. This market is dominated by refineries, and the decisions of refineries are influenced by the demand of end users. However, this market also faces short-term fluctuations, depending on the rise and fall of cargo prices and demand.

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At the same time, the prices of Mediterranean Caspian CPC blend crude oil and Azerbaijani light crude oil are weakening, and a large amount of Nigerian crude oil has not yet found buyers. Derivatives linked to the physical market have also weakened significantly in recent weeks.

At least five traders have indicated that the softening of crude oil prices is due to the increase in U.S. crude oil exports. As European refineries begin to complete their routine seasonal maintenance, the volume of crude oil deliveries begins to accelerate. The reduction in diesel production profits has also restrained the premium that refineries are willing to pay for crude oil, which has also dragged down the Asian market.

However, after Saudi Arabia and Iraq raised the official crude oil prices for June to the highest level since September last year, the supply of sulfur-containing crude oil in Europe may become tight. Although sulfur-containing crude oil only accounts for a small part of Europe's crude oil imports, some refineries may switch to low-sulfur crude oil, thereby providing support for oil prices.

Macquarie Group warned this week that after the easing of tensions between Israel and Iran, the market has recently shown a bearish sentiment, and at the same time, the geopolitical risk premium has decreased, and the possibility of oil prices remaining below $80 per barrel is increasing.

Even so, most traders and analysts still expect crude oil prices to rise in the coming months, as the seasonal increase in demand for gasoline and aviation fuel in the summer will drive refining and processing, leading to a tight crude oil market.U.S. and Brent crude oil are expected to post weekly gains this week, as data released by the world's two largest crude oil consumers, the United States and China, showed increased demand, and ongoing uncertainty in the Middle East provided support.

Previous data indicated that rising refinery run rates led to a decline in U.S. crude oil inventories. Meanwhile, China's oil imports in April were higher than last year due to improved trade activity. At the same time, the ceasefire negotiations between Israel and Hamas yielded no results, and concerns about the risk of supply disruptions in the Middle East persist.

ANZ Research stated in a report: "Signs of continued strong demand in China should provide good support for the commodity market."

Citi analysts pointed out, "Israel's military operations in Rafah and the increasingly tense situation on its northern border remind us that geopolitical risks could persist at least throughout the second quarter of 2024." However, the bank's analysts expect oil prices to fall before the end of 2024. Against the backdrop of a loose supply and demand fundamentals, the average price of Brent crude oil in the second quarter is expected to be $86 per barrel, and $74 per barrel in the third quarter, with signs indicating that global oil demand growth "seems to be slowing down."