How far is it from "parity oil" when international oil prices fall below the $100 mark?

Data map: Oil production in oil fields.

Photo by China News Agency reporter Sun Rui

　　China News Service, July 15 Question:

　　Ge Cheng from China-Singapore Finance

　　Since entering 2022, international oil prices have been "surging" all the way, breaking the $120 per barrel mark several times.

Under the existing pricing mechanism for refined oil products, domestic oil prices showed a pattern of "ten rises and three falls" during the year. When oil prices were at a high point, filling a tank of oil cost more than 100 yuan more than at the beginning of the year.

　　Recently, the price of Brent crude oil futures fell below the important psychological level of $100, hitting a new low in three months.

Many institutions predict that the price of refined oil may usher in a "three consecutive declines".

Why did the international oil price fall below the $100 mark?

　　"The drop in international oil prices is caused by the superposition of political, economic and financial factors." Dong Xiucheng, executive dean of the Institute of International Business Strategy at the University of International Business and Economics, said in an interview with Zhongxin Finance that the core factor behind the drop in oil prices lies in the world The economic situation, especially in Europe and the United States, is not optimistic.

　　"Economic development itself is actually positively related to oil prices. Of course, when the economy (growth) accelerates, the demand for energy consumption will be greater." Dong Xiucheng said, conversely, when the economy is in recession, energy consumption demand will weaken. This is the most important factor.

　　Lin Boqiang, dean of the China Energy Policy Research Institute of Xiamen University, also holds the same view. He told Zhongxin Finance, "After the Fed raised interest rates, the global stock market fell, and the market was not optimistic about the prospects of the economy, and it was also not optimistic about the prospect of oil demand."

　　In Dong Xiucheng's view, political factors have also led to a further drop in international oil prices.

"Around the energy sanctions and counter-sanctions between Europe and Russia, the measures are generally taken by Russia in a relatively active position."

　　Dong Xiucheng said that the import of Russian oil and gas is not a ban, but a price limit order, which is actually a relaxation of sanctions.

"Because sanctions are strictly speaking, sanctions are bans (not from you), can send such a signal (say), you can enter, but the price may have to be controlled, which itself is a sign of slowing down ."

　　In the opinion of the two experts, financial factors are also the "boosting agent" for the decline in oil prices.

Recently, the euro fell to its lowest level against the dollar in nearly 20 years, exacerbating the downward trend in oil prices.

　　Dong Xiucheng said, "There is an inverse relationship between the U.S. dollar and oil prices. Oil and natural gas are traded internationally. These commodities are mainly priced in U.S. dollars, but a depreciation of the U.S. dollar usually leads to an increase in oil prices, and an appreciation of the U.S. dollar leads to a decrease in oil prices. "

Oil prices in the second half of the year lower than the first half?

　　Although the international oil price briefly fell below US$100, it is still high on the whole.

　　In Dong Xiucheng's view, the oil price in the second half of the year will be lower than the level in the first half of the year, but it will definitely fluctuate and fluctuate.

It doesn't mean that if it falls to $95, it will not return to $100.

　　"Any major event in the world may cause oil price fluctuations." Dong Xiucheng said, but no matter how volatile, international oil prices should generally be in a downward trend in shocks.

Oil prices may be lower next year than this year, but it will be difficult to drop to around $40 or $50.

　　Xi Jiarui, a crude oil analyst at Jinlianchuang, said that under the scenario of falling demand and stable supply, crude oil prices have not bottomed out and will continue to maintain a shocking pattern.

In the short term, if the epidemic situation is not optimistic, oil prices may test the support level of $90 per barrel; of course, if the price sanctions against Russian oil in the West are advanced, then oil prices may return to the top of $100 per barrel.

High oil prices have little impact on China for now

　　Data from the National Bureau of Statistics showed that the national consumer price index (CPI) rose by 2.5% year-on-year in June.

In this regard, Dong Xiucheng said that China's inflation situation is relatively ideal, but if the high oil price continues for a long time, we are actually under pressure.

　　Lin Boqiang said that high oil prices have little impact on China at present.

The reason for this is that China's energy is mainly coal, and coal prices are not a problem, and the impact of oil and gas prices on the economy is relatively weak.

"In terms of the proportion of oil and gas energy, Europe is about 60%, and the United States is more than 70%, so the foreign inflation rate is very high."

　　In Dong Xiucheng's view, maintaining a relatively stable supply, improving the reserve system, and adopting policy adjustments are three important measures to deal with high oil prices.

"Ensuring the stability of the supply market and appropriately reducing the fuel consumption tax will also guarantee the operating costs of the entire society, including the interests of consumers." (End)