China News Agency, Beijing, August 16 (Liu Wenwen) Since the beginning of this year, international oil prices have been adjusted repeatedly, with twists and turns.
Since the price of international crude oil futures quickly rose to US$100 per barrel at the beginning of the year, oil prices have continued to rise in shocks, breaking through the US$120 per barrel mark at one point.
However, in recent days, under the pressure of the global economic downturn, the performance of the crude oil market has been sluggish, and the international oil price has hovered above $90 per barrel.
International oil prices continue to fall, is the trend over?
Will it return to the hundred dollar mark?
Oil prices fall as supply tensions ease
As of the close on the 15th, light sweet crude oil futures for September delivery on the New York Mercantile Exchange fell $2.68 to close at $89.41 a barrel; London Brent crude oil futures for October delivery fell $3.05 to close at $89.41 a barrel $95.10.
On the news, oil major Saudi Aramco said on Sunday that if needed, Saudi Aramco can produce oil at maximum capacity, and continuous investment in the oil industry is necessary, and Saudi Aramco can increase production to 12 million barrels per day at any time.
In addition, in the early morning of Beijing time, Iran said it had issued an official response to the draft text of the nuclear agreement proposed by the European Union.
Expert analysis pointed out that once the nuclear agreement is resumed, the sanctions on Iran's oil exports are lifted, and the global market supply tension caused by sanctions against Russia will also ease.
Due to factors such as Saudi Aramco's preparations to increase production, progress made in the Iran nuclear deal, the recent resumption of production on offshore drilling platforms in the US Gulf of Mexico and the extinguishment of fires at the Cuban oil storage base, the current concerns about oil supply disruptions have eased, and it is expected that the crude oil market will continue to grow in the future. The oversupply sent oil prices lower on Monday.
Global economic downturn, oil prices under pressure
However, analysing the deep-seated reasons for the recent continuous fluctuation of international oil prices, the industry generally believes that this is mainly affected by the market's concerns about the economic outlook.
Data showed that the U.S. consumer price index (CPI) rose 8.5% year-on-year in July, 0.2 percentage points lower than expected and far from the high of 9.1% set in the previous month.
Analysts believe that inflation in the United States has slowed down significantly, except for the Fed's sharp interest rate hikes, which are significantly related to the downward trend in energy prices amid concerns about a global economic recession.
Despite this, U.S. inflation is still running at a high level, and considering that the core CPI has not dropped significantly, it cannot be ruled out that the U.S. CPI may rise again in the later period.
Affected by recession fears, OPEC and other institutions lowered their forecasts for crude oil demand this year.
OPEC expects global crude oil demand to grow by 3.1 million barrels per day in 2022, compared with 3.36 million barrels per day previously, further cooling oil prices.
Morgan Stanley (MS) chief global economist Seth Carpenter wrote a few days ago that global recession clouds are gathering.
The U.S. economy fell into a "technical recession" in the second quarter, while fears of a recession in the euro zone intensified.
In the context of the global economy generally speaking badly, international oil prices are facing greater upward resistance.
At present, the tightening of monetary policies in many countries around the world has accelerated, central banks have generally raised interest rates, and the global economic recession is expected to increase.
Can we return to the hundred dollar mark?
Although the current oil price has fallen, but overall, it is still relatively strong.
Expert analysis pointed out that recently, OPEC+ oil production increase is limited, the G7 is still considering the global embargo of Russian oil, and the decline in drilling data in the United States has formed a positive support for the international crude oil market.
Looking ahead, will the international oil price return to the 100 yuan mark under the global economic downturn?
Data showed that the number of non-farm payrolls in the United States rose strongly in July, and the unemployment rate was lower than expected; China's crude oil imports rebounded in July.
"The improvement in some economic data has alleviated investors' concerns about economic recession to a certain extent. In addition, energy supply problems still exist, and Russia's supply cut off through Ukraine's crude oil pipeline has played a supporting role in oil prices." Commodity price monitoring agency Jin Lianchuang crude oil analyst Han Zhengji said.
But he also reminded that international oil prices are still at a trough of nearly 6 months, and investors' concerns about poor demand prospects have not completely subsided.
The outlook for energy demand remains cloudy amid a sluggish U.S. and European economy and growing debt distress in emerging market economies.
Still, Goldman Sachs remains bullish on future oil prices, saying the case for the current rise in oil prices remains strong and that market shortages are worse than expected in recent months.
Goldman Sachs expects Brent prices to rebound well above forward market levels, and its third- and fourth-quarter forecasts are now at $110 to $125 a barrel.
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