1. International crude oil futures price hit a low of nearly two months
According to the report of Beijing News , the price of light crude oil futures delivered by the New York Mercantile Exchange (WTI) fell by US$3.01, with the largest intraday drop of 5.1% at one point, closing at US$77.94 per barrel, a drop of 3.72%; the lowest since September 27. Brent (Brent) January crude oil futures closed down 3.34% at $85.41 per barrel, with the deepest intraday drop of 4.8% and hitting $84, also hitting a low in the past two months.
Market insiders said that the EU plans to set the crude oil price upper limit for Russia's crude oil price is higher than expected, and it is expected to have little impact on Russian crude oil exports. In addition, the unexpected rise in US gasoline inventories has caused international crude oil futures prices to fall to two-month lows. In terms of
inventory, the U.S. Energy Information Administration (EIA) released its latest inventory report, showing that U.S. inventory fell last week, but both gasoline and distillate oil inventories increased significantly, with gasoline inventories increasing by 3.1 million barrels and distillate oil inventories increasing by 1.7 million barrels. The total oil inventories increased for the first time after six weeks of decline.
In addition, U.S. crude oil production remained stable at 12.1 million barrels per day, and the operating rate of U.S. refinery operations increased by 1% to 93.9% weekly. The U.S. refined oil meter fell sharply by 1.2 million barrels per day to 19.9 million barrels per day. The net imports of U.S. oil products rose in the week, which also led to an increase in inventory.
data also shows that the number of active oil drilling platforms in the United States has increased. This week, US energy companies have increased the number of active oil and natural gas rigs for the fourth consecutive week for the second consecutive month. As of November 23, the number of active drilling rigs increased by 2 to 784, the highest since March 2020.
2. Is oil prices going to enter a downward cycle?
We see that the current international oil price has fallen sharply, with a drop of more than 3%. Many people are talking about what is going on in the international oil price? How should we view the current market changes in international oil prices?
First of all, from the perspective of the development of the entire market, it is actually normal for international oil prices to fall. From a macro perspective, the current entire market is actually facing the slowdown of the Federal Reserve's interest rate hike . If the Federal Reserve's interest rate hike starts to slow down, it will inevitably lead to a relative weakness of the US dollar. Once this trend is formed, we have repeatedly said before that the two between oil prices and the US dollar are an interrelated relationship. Once the Fed has problems, it will definitely lead to the economic outlook of the entire United States. There are certain concerns. This concern will inevitably lead to the control of market demand. Therefore, under the situation of bearish market demand, international oil prices are likely to decline. This is an inevitable result of the development of the entire market. Therefore, the current decline in international oil prices is normal from a macro perspective.
Secondly, from the perspective of the development of the entire international oil price, the current proposal to set a price upper limit for international oil prices is in the process of brewing. Once this price upper limit is formed, it is likely to cause a relatively large problem with the supply of oil. In fact, this is a relatively easy situation to experience pressure, but this has also driven the entire market and the future of oil has become more pessimistic, which naturally drives the decline of international oil prices. At the same time, we have also noticed that the current U.S. oil inventories have shown a certain degree of unexpected increase. This unexpected increase has brought more uncertainty to many people about the future development of the oil market, and their expectations have seen large fluctuations, which have also led to a downward trend in international oil prices.
Third, from the perspective of long-term market development, the price fluctuations of oil are ultimately the influence of the dual role of supply and demand. We see that the current increase in inventory is also increasing. The inevitable result of the two increases, which leads to a supply and a relatively surplus state of the entire oil price, and the demand has not increased relative to it. Therefore, the final result is that international oil prices show a downward trend. However, this supply growth is only a relative process. Once the entire market remains a comprehensive supply in the future, there will definitely be OPEC countries to reduce the market supply. Once this market supply is reduced, it will inevitably lead to an increase in international oil prices.
So, we can say that the current fluctuations in international oil prices are more of a short-term phenomenon. Whether a long-term trend has been formed, we may still need to conduct further analysis and judgment.
