The hottest low level of international oil prices

2022-08-09
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The low volatility of international oil prices is expected to be difficult to get rid of the decline in June

affected by the strengthening of the US dollar, the expectation of the Federal Reserve's withdrawal from loose monetary policy and the mixed data of major economies, the overall international oil prices in May showed a weak volatility pattern. Looking forward to the future, under the combined effect of the rise in U.S. gasoline inventories, the steady rise in OPEC crude oil production and the expectation of the Federal Reserve's withdrawal from quantitative easing, we believe that it is difficult for international oil prices to get rid of the decline in June and rise seasonally, which is expected to remain weak and volatile

the international oil price fluctuated at a low level in May

on the first trading day in May, the international oil price fell sharply due to the high crude oil inventory in the United States and the weaker than expected economic data in the United States. Light crude oil futures for June delivery closed at US $91.03 per barrel on the New York Mercantile Exchange, and London Brent crude oil futures for June delivery closed at US $99.95 per barrel. Oil prices in both cities were the lowest in the month

after that, due to the European Central Bank cutting interest rates as expected, the Federal Reserve continuing quantitative easing, thereby saving raw material monetary policy, better than expected U.S. employment data, and Israeli air strikes causing concerns about the supply of the Middle East, international oil prices rebounded sharply. By May 8, the oil prices in the two cities closed at $96.62 and $104.3 per barrel respectively, which was the first watershed of international oil prices in the month

from the 8th to the 13th, the oil prices in the two cities fell for four consecutive trading days, then rebounded with a strong momentum, and ushered in the second watershed of the oil price of the month on the 20th. On the same day, the oil price in the New York market closed at $96.71 a barrel, the highest in the month

since then, affected by the strengthening of the US dollar, the speech of Fed Chairman Bernanke and other key officials to strengthen the expectation of withdrawing from quantitative easing monetary policy, the international oil price as a whole showed a volatile downward trend. By the 29th, dragged down by demand concerns, the oil price in New York once again hit a low in recent weeks near $93 a barrel

according to the overall situation of the whole month, the international oil price is basically in a weak pattern, maintaining a volatile trend. The operating range of oil price in New York market in the month was US $91.03 to US $96.71 per barrel, and the monthly average price was US $94.94 per barrel; The operating range of oil price in London market is US $99.95 to US $105.5 per barrel, and the monthly average price is US $103.39 per barrel

the crude oil price difference between London and New York continues to narrow. On May 30, the oil price difference between the two cities was only $8.58 per barrel, which hit a record high of $27.88 per barrel on October 14, 2011

main factors affecting the recent trend of international oil prices

from the perspective of the operation of oil prices in the current month, since the fundamentals of supply and demand, the macroeconomic data of major economies have not been significantly improved compared with the previous period, and there have been no serious geopolitical events in the Middle East, several major factors that traditionally affect the fluctuation of oil prices have little impact on the international oil prices in the current month, The strong rise of the US dollar index has become the most prominent factor affecting the trend of international oil prices

1. The impact of supply and demand and economic fundamentals is weakening

in terms of supply and demand, OPEC data show that with Saudi Arabia increasing production, the organization's crude oil production in April increased to the highest level in five months; The International Energy Agency (IEA) released a report saying that in the next five years, the United States will account for one third of the world's new oil supply, and it is expected that oil prices will fall moderately in the future

at the same time, the IEA also raised its expectations for global oil demand for the first time since January this year. IEA predicts that the global daily oil demand will increase by 800000 barrels to 90.6 million barrels this year. On the whole, the impact of the main news of supply and demand on the trend of international oil prices in the month has weakened as a whole

from the perspective of economic fundamentals, despite the mixed economic data released by major economies in the month, the weak recovery momentum of the global economy has not been significantly improved compared with the previous period, and the impact of economic fundamentals on oil prices in the month has not changed significantly compared with the previous period

from the perspective of the United States, the real estate market continues to recover, but the employment market reappears repeatedly. In Europe, the European debt crisis is difficult to improve, and the European economy continues to shrink. In the first quarter, the eurozone economy fell 0.2% month on month, and the EU fell 0.1%. In addition, China's economic data was also weaker than expected

from the perspective of the situation in the Middle East, despite the escalation of the situation in Syria, 7. The refrigerant high-voltage protection switch: protecting the compressor and prolonging the service life increased the tension in the oil market, briefly pushing up the international oil price, but it did not cause a sustained impact, and its impact on the overall oil price trend of the month was relatively limited

2. The strong rise of the US dollar index has become the main reason for the decline of international oil prices for several times

the US dollar index rose sharply in May, from 81.746 closed on April 30 to 83.027 on May 30, an increase of 1.6%. The strong rise of the US dollar index in that month has become a prominent factor affecting the trend of international oil prices

in May, many Fed officials made intensive exit statements. Bernanke pointed out in his testimony to the Joint Economic Committee of Congress on the 22nd that the Fed will decide to increase or reduce the scale and types of asset purchases according to the changes in the job market and inflation level, so as to maintain a loose and moderate monetary policy. If the economic data shows that the economy continues to improve, the Federal Reserve may decide to slow down the pace of asset purchases in the coming months. Bernanke's speech strengthened investors' expectations of the Fed's future exit from quantitative easing, strongly boosting the dollar's rise in the month. At the same time, the European Central Bank cut interest rates to promote growth? Against the background that the Bank of Japan is committed to quantitative easing, the euro? The bearish outlook for the yen also supported the rise of the US dollar

traditionally, the change of US dollar exchange rate has a very direct impact on the price of international bulk commodities such as crude oil priced in US dollars. The trend of international oil price has a typical negative correlation with the US dollar exchange rate. Whenever the US dollar depreciates, the international oil price priced in US dollars will rise, and vice versa

due to the existence of this negative correlation, the change of the US dollar exchange rate often becomes the most direct factor determining the trend of oil prices when there is no substantial change in short-term fundamentals. Judging from the situation of the month, on the trading day when there is no important economic data, the trend of the US dollar has become the biggest factor affecting oil prices, and has a significant negative correlation with the rise and fall of oil prices. For example, on May 2 and 22, when the US dollar index rose significantly, the oil price of the members of the international alliance fell significantly according to the division of labor, and the applicable laws and regulations of the country clearly stipulated otherwise

it is difficult for the international oil price to get rid of the decline in June

the United States will gradually enter the seasonal peak of travel since June, which will drive the rise in demand for gasoline and crude oil. Generally speaking, the international oil price in June is easy to rise but difficult to fall

however, on the one hand, the published economic data of major economies in the first quarter have little bright performance, and the weak macroeconomic performance is bound to reduce the expectation of future crude oil demand. On the other hand, the latest data released by the US Energy Information Administration (EIA) shows that US gasoline inventories are rising. At the same time, the ministerial meeting of OPEC member states on May 31 is likely to maintain the original policy, which means that crude oil production from OPEC will maintain a steady upward trend. In addition, the Federal Reserve will hold a monetary policy meeting again in mid June, and the expectation that the Federal Reserve may withdraw from quantitative easing in the future will once again dominate the short-term oil price trend, making the improvement of early market risk appetite effectively weaken the continuous driving force of international oil prices

based on the above factors, we believe that it is difficult for the international oil price to get rid of the decline in June, with a seasonal rise, and it is expected to maintain a weak and volatile pattern

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