Guangda Futures: Crude Oil Hits Limit Up Again, Beware of High-level Risks.

Following the significant increase in the energy and chemical sector during the night session last Friday, most energy and chemical varieties hit the limit up after the opening on Monday, with the main crude oil contract rising by 17%. Additionally, after domestic crude oil hit the limit up, WTI crude oil and Brent crude oil in the foreign market continued to surge. As of press time, both WTI crude oil and Brent crude oil have surpassed the $115 per barrel mark. Considering that Iran controls the Strait of Hormuz, a key shipping chokepoint, even if geopolitical tensions ease, the resumption of passage and the resumption of production in the oil fields of Middle Eastern Gulf countries still face significant challenges. With tensions escalating between the two sides over the weekend, there may be additional risk premiums injected into oil prices. Specifically, the current driving force behind oil prices is the duration of the blockade of the Strait of Hormuz and the extent of the impact on Middle Eastern oil facilities in the event of continued conflict, with both factors currently influencing each other. As the second week of pricing has begun, it is expected that the overall volatility of oil prices will further increase this week. During this period, oil prices will be particularly sensitive to news, leading to an increase in volatility. Considerations for oil prices will be vastly different under different time frames. The addition of extreme emotions may lead to an escalation of the intensity of conflicts between the two sides, sustained damage to oil facilities in the Middle East, continued blockade of the Strait of Hormuz, reduced production in oil-producing countries, and even further oil price surges or breakthroughs. It is important to be alert to the risk of significant fluctuations in oil prices.