The next day.
A major news story made the front page of economic newspapers around the world.
The Wall Street Journal: "According to the latest news from the US embassy in Iraq, in the early hours of July 12, Gulf time, Iraqi senior official Azawi held an emergency press conference. The following is the full text of the press conference."
Azawi: "On July 11, our safety team conducted a safety inspection of some wells and found that some mechanical equipment was seriously aging."
"In addition, we also discovered that there was a crude oil leak at the 411 oil well. For the safety of the workers, we immediately stopped the drilling work at the 411 oil well."
"And it was decided that in the coming period, all oil wells across the country would be inspected and checked until all inspections were completed before we would resume oil extraction."
Reporter: "Mr. Azawi, is all the oil wells being shut down at once? Why not in batches?"
Azawi: "In our country of Iraq, the most important thing is the integrity of human life; other things are not considered."
Reporter: "So, Mr. Azawi, if all the oil wells were to cease production, what would be the losses to your country?"
Azawi: "Incalculable!"
According to relevant information reviewed by reporters, Iraq was previously one of the major crude oil exporters in the Gulf region. This nationwide shutdown of oil production will have a certain impact on the global crude oil market.
"According to relevant data, Iraq's daily crude oil production capacity is 1.2 million barrels. If Iraq stops producing crude oil in its domestic wells, there will be a shortfall of 1.2 million barrels of crude oil per day in the short term."
This news came out.
This was first reflected in the international crude oil futures market.
On the 12th, during Asian trading hours, NYMEX crude oil opened at $17.56, one cent higher than yesterday's high of $17.55.
Don't underestimate the fact that it's only one cent more.
This fully demonstrates that the bulls' enthusiasm has been completely ignited.
Let's review the candlestick chart from the first half of the month.
The price of crude oil at $17.5 per barrel has created a significant resistance level, and the bulls have failed to break through it several times.
There's just too much selling pressure at this price point.
To push the price up, a massive amount of capital is needed.
Not only that.
Do the bulls have massive amounts of capital, but the bears don't?
The main short sellers in the crude oil futures market are not capitalists, but rather the major crude oil exporting countries that are hedging their positions.
In other words, the price of a product is locked within a certain range.
Going forward, whether crude oil prices rise or fall will have nothing to do with the exporting countries.
Conversely, going long can also be understood as stockpiling the produced crude oil, creating a shortage in the market, and then selling all of this crude oil at a high price.
Whether one is bullish or bearish, it merely represents a personal opinion on crude oil prices.
Once the vast majority of people reach a consensus, that becomes the price of crude oil.
now.
Due to maintenance work on oil wells in Iraq, there will be a daily crude oil supply shortfall of 1.2 million barrels. If no other country or company fills this gap, it will lead to a panic buying situation.
This is the logic behind the rise in crude oil prices.
Clearly, individuals and organizations that saw this message all smelled the scent of money.
In a short time, a large amount of hot money poured into the international crude oil futures market, rapidly pushing up oil prices.
$17.60.
$17.68.
$17.74.
As the first rays of sunlight streamed into the bedroom in the early morning, the price of international crude oil fluctuated between 17.8 and 17.7.
Not only that!
After the Wall Street Journal published this news, more than 30 newspapers and periodicals, including Reuters, The Sun, Global Times, and International Oil News, also reprinted it.
8 a.m.
The first thing Wangcai does after waking up is to turn on his computer and check international crude oil prices.
$17.75?
What happened?
Wangcai thought he was seeing things, so he rubbed his eyes hard and looked again.
The computer screen displayed $17.76.
Holy shit!
What exactly happened? How did prices rise so much overnight?
Wangcai was shocked. He held the mouse in his right hand and kept switching back and forth between the intraday chart and the daily candlestick chart.
It really went up!
Chen Dong's account has 30,000 standard lots of long contracts, with an average position size of $16.82.
The current price is $17.76.
That is to say, each barrel of crude oil yields a profit of $0.94.
One standard lot consists of 1,000 barrels of crude oil.
At this time, Chen Dong's account had 30,000 long contracts, with a total unrealized profit of US$28.2 million.
Oh my god!
What the hell just happened?
Wangcai clearly remembers calling Chen Dong last night and suggesting that Chen Dong hedge 30,000 long contracts. At that time, the price of crude oil was only $17.45, with a total unrealized profit of $18.9 million.
With a profit of $18.9 million, that's no small sum, no matter what.
Choosing to cash out and secure the profits is probably the thought of most people.
However!
Chen Dong refused.
Even more so, it gave Wangcai a false impression.
Chen Dong simply didn't bother clearing out his stock at this price.
In Wangcai's view, this is a typical example of an inflated ego.
He had seen many people like that.
Especially in the financial sector.
Zhang San is an office worker. He heard from others that the financial field is very profitable, so he decided to invest some money in it.
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