Chapter Seven: The Fierce Battle Between Bulls and Bears in Crude Oil Trading

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Yan Fei immediately pulled up the international crude oil price chart and saw that today’s opening price was $28.56 per barrel. The current trend was an upward attack, with major players continuously placing long positions.

After watching the market for a few minutes, Yan Fei noticed the intense battle between bulls and bears. The best bid surged by 15 contracts, only to be immediately crushed by a 20-contract short order, pushing the price down to $28.45.

With prices suppressed, the bulls refused to back down. They countered with a 30-contract buy order, absorbing all the short positions at the first and second sell levels and driving the price up to $28.66.

Back and forth they went, fiercely contesting between $28.45 and $28.86. In less than five minutes, over 140 contracts were traded, amounting to more than $14 million.

Staring at the chart, Yan Fei sensed that $28.40 was the bulls’ bottom line. Whenever the bears tried to hammer below that price, massive buying support quickly emerged. Without hesitation, Yan Fei converted one million yuan into $145,000, leaving less than ten thousand yuan untouched in his account.

After funding his account, Yan Fei chose the minimum 5% margin. The system showed he could leverage up to $2.9 million, meaning that if the bears pushed the price down by 5%, his $145,000 would be liquidated instantly.

Though Yan Fei had weathered many storms in his previous life and managed accounts worth tens of millions, he couldn’t help but feel tense, his eyes fixed solemnly on the screen.

After another minute of observation, confident the bears wouldn’t press lower, Yan Fei acted decisively. He absorbed all short orders at several ask levels, instantly deploying the full $2.9 million, completing 101 long contracts at an average price of $28.52 per barrel, totaling $2.88052 million. The remaining funds were insufficient to buy another contract.

As over a hundred long contracts hit the market, the trading floor fell silent for a moment. Countless spectators at their computers immediately sensed the bulls’ offensive and rushed to place their own long orders.

Yan Fei sat before his screen, watching 2- and 5-contract long orders flutter in like snowflakes. Within seconds, the market erupted with over 400 long contracts, pushing the price up to $29.58 per barrel.

Seeing a floating profit of $107,060 on his account, a joyful smile spread across Yan Fei’s face. Earning such a return in mere seconds—that was the allure of crude oil futures.

Meanwhile, in a skyscraper in New York, Lawrence stared grimly at the screen and bellowed, “Has Clendo made a move? Over 500 long contracts just surged out, slashing our profits by more than three million dollars. Find out what’s going on immediately.”

Soon, his assistant whispered in his ear, “Clendo hasn’t acted. As for other bulls, we don’t know. What should we do? Take profits on delivery?”

Lawrence said nothing, staring at the screen for several seconds before grinding his teeth, “Act at once. Crush the price down. Tomorrow, the Arab region will definitely announce increased production. Oil prices will surely fall.”

Several traders sprang into action, dumping a massive volume of short orders, forcing the crude price down to $28.67 per barrel and sending the market into a wail.

Yan Fei watched as his floating profit vanished by over $90,000. His eyes stung slightly as he rubbed them, confirming the loss. A grave expression settled across his face.

He focused intently on the screen, taking a deep breath to calm himself and swiftly returned to a composed trading state. He analyzed the chart carefully, his expression gradually becoming serene.

From his technical analysis earlier, Yan Fei believed the bulls’ heavy position clustered around $28.45. The bears would need a combined effort to push below it. Since there was no negative news, the bulls were likely waiting on some announcement—though he didn’t know what it was.

After watching the market a while longer, Yan Fei saw the fierce battle easing. The trade volume dropped to just over a dozen contracts per minute. He shut his computer and planned to get some sleep, intending to check back after waking.

The next morning, Yan Fei opened his eyes, washed up, ate breakfast, and immediately checked his computer. The crude price had oscillated between $28.52 and $28.68 all night, currently resting at $28.55.

He browsed international news websites and quickly found a report about the Arab region: “Saudi Aramco plans to negotiate crude oil trade with U.S. authorities tomorrow.”

After reading carefully, a pleased smile crossed Yan Fei’s face. This confirmed the U.S. economy was poised to recover, increasing oil consumption. Market demand was rising, so oil prices should naturally climb.

However, looking back at the chart, his smile faded. The price hadn’t budged, indicating that this seemingly positive news had not triggered any market movement.

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After a moment’s thought, Yan Fei understood why: if Saudi Aramco and U.S. authorities reached a trade agreement, production would likely increase to meet demand, quickly balancing the market. That explained the lack of price movement.

Understanding this deepened his doubts. He recalculated the chart and was certain the bulls remained. Why then were the massive long positions inactive? Could there be even more important news yet to be confirmed?

With this question in mind, Yan Fei bypassed the Great Firewall to access foreign websites, scouring for information for hours without success. Returning to the chart, he saw oil still fluctuating near $28.60 and fell into contemplation.

If he delivered now, he’d make a small profit. But if he waited for confirmation and the news turned negative, his margin of over $100,000 might evaporate instantly.

After a few seconds of hesitation, Yan Fei shut his computer and muttered, “I remember the last big oil surge on Earth. I don’t believe it’ll crash this time. Damn it, life only offers a few chances to fight—let’s do this!”

Turning off his computer, Yan Fei picked up a finance book and immersed himself, absorbing knowledge rapidly and pushing everything else from his mind.

At noon, roused by hunger, Yan Fei went downstairs for a quick meal. Back in his room, he opened his book again but suddenly stiffened.

He remembered he hadn’t checked today’s stock market. Opening his computer, he soon saw the board for ST Dongyuan: a locked-limit up opening price, with over 100 million yuan in buy orders.

Relieved, though this result had been expected, he studied the chart carefully and predicted at least ten more limit-ups ahead. Satisfied, he closed the computer and resumed his study of Earth’s financial knowledge.

Time passed, and by evening Yan Fei checked crude oil prices again—still hovering near $28.50. He once more circumvented the firewall to see if the Saudi Aramco-U.S. negotiations had produced results.

After half an hour of fruitless searching, Yan Fei concluded this was futile. It was better to watch the market itself; once someone knew the news, price action would reveal it.

So, he studied finance while glancing at the chart every half hour. Approaching midnight, drowsy, he glanced at the screen and was instantly chilled to the bone; all sleep vanished.

A massive 1,000-contract short order slammed the market, pushing the price from $28.50 down to $28.45, exposing over 4,000 long contracts beneath.

But that 1,000-contract short was just a signal. A flood of short orders poured in like snowflakes, fiercely attacking the longs. In moments, they overwhelmed the 4,000-plus long contracts and plunged further downward.

Before Yan Fei could react, the bears had wiped out more than 4,000 long contracts, driving the price down to $28.20 and enticing even more shorts to hammer lower.

Seeing this, Yan Fei’s heart tightened. Panic surged from his core, but his sixteen years in finance forced him to stay calm, refraining from panic-selling.

He stared at the screen, eyes gleaming with resolve. He was waiting for the bulls’ counterattack, for he had spotted massive long positions lurking at $28.10. Unless more longs appeared below that level, the bulls would surely strike back there.

Sure enough, within a minute, the price fell to $28.15 and the bears’ momentum waned, with only about 300 short contracts left.

Relieved, Yan Fei smiled confidently and whispered, “Offense and defense alike, if the enemy can advance, so can I. Let the attack begin.”

As he spoke, a massive 1,000-contract buy order surged out, instantly consuming all short orders at the fifth ask level and driving the price upward. Other longs poured in like snowflakes, forming a powerful wave that lifted the price to $28.25.

The bears countered with a 500-contract short to suppress the bulls, but a matching 500-contract long swallowed it whole, pushing the price to $28.26.

After absorbing this large short order, the fifth ask level no longer held any effective shorts, and scattered small long orders overwhelmed the resistance, rapidly pushing the price to $28.30.

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Before the bears could regroup, the bulls launched another 1,000-contract buy order, breaking through a series of sell orders and raising the price to $28.50, attracting more retail long orders.

At this point, the bears seemed to give up resistance, and the bulls, in tacit agreement, refrained from pressing further. The market instantly calmed, with only small retail orders exchanging hands.

Seeing the market stabilize, Yan Fei checked his account. The several tens of thousands of dollars in floating losses on his margin had returned, settling his mind. He bypassed the firewall again for further information.

Soon, he found a report detailing the Saudi Aramco and U.S. authorities’ negotiation results, stating they had reached a friendly agreement and that positive crude oil trade news would soon emerge.

Reading this, Yan Fei understood the earlier market turbulence. The bulls’ confidence in pushing the price back up despite this news indicated that even more significant information was still pending.

He continued browsing the web but found no useful news. Glancing at the clock, now after 1 a.m., he could no longer stay awake and shut his computer, falling into bed.

The next morning at 10 a.m., Yan Fei awoke, ate breakfast, and checked the market. The crude price had barely moved overnight. He also scanned the news without finding anything new.

He closed the crude oil page and opened the major Chinese stock market page to check ST Dongyuan. True enough, it remained locked at the daily limit with over 100 million yuan in buy orders. Satisfied, he closed the page.

Preparing to continue his financial studies, his phone rang. It was Liu Suxin.

“Senior, tomorrow’s Saturday. Are you free?” she asked cheerfully.

Yan Fei smiled, “Yes, I’m free. What’s up? I’m just about to get ready.”

“Not that!” Liu Suxin giggled. “There’s a concert tomorrow—Jay Chou’s! I heard all guys love his music. I bought two tickets and want to invite you.”

Yan Fei, a genuine fan of Jay Chou and one of the few singers he truly liked, happily replied, “That’s great! I’ve long wanted to attend a Jay Chou concert.”

After making plans, Yan Fei resumed his routine of studying and monitoring the market. The day passed quickly with no useful news and the crude price oscillating steadily near $28.54.

The next day, Yan Fei woke early, dressed, ate breakfast, and waited on the street. Soon, Liu Suxin arrived in a Ferrari.

She stepped out, smiling at him, “Senior, you drive!”

Taking the keys naturally, Yan Fei waited for Liu Suxin to settle in. Amid countless envious glances, he drove the Ferrari toward the concert venue.

Liu Suxin chatted casually, “Senior, what have you been busy with these days?”

Yan Fei smiled, “Watching the market, checking news. I bought $2.9 million worth of crude oil futures contracts, so I’ve been…”

Listening to Yan Fei’s story about the turbulent crude oil futures market, Liu Suxin felt a thrill. Although she had read about such market events in books, hearing it firsthand made the financial world’s allure more vivid and real.