Qilu Evening News·Qilu One Point reporter Zhao Enting compiled
Last week, affected by factors such as the ongoing conflict between Russia and Ukraine, crude oil futures prices in New York and London continued to rise. Among them, Brent crude oil futures in London even reached every 100,000 yuan in the session on the 7th. A barrel hit $139, the highest in nearly 14 years. However, affected by various negative factors, international oil prices suffered a plunge of more than 10% on the 9th. After continuing the decline on the 10th, international oil prices rose again on the 11th.
Since this week, due to multiple negative impacts on supply and demand, international oil prices have continued to fall, closing below the integer mark of US$100 per barrel on the 15th. On the same day, the price of light crude oil futures for April delivery on the New York Mercantile Exchange fell by US$6.57 to close at US$96.44 per barrel, a decrease of 6.38%; the price of London Brent crude oil futures for May delivery fell by US$6.99 and closed at US$96.44 per barrel. It was US$99.91 per barrel, a decrease of 6.54%. Compared with the highs on March 8, New York oil prices and Brent oil prices have fallen by 22.04% and 21.93% respectively.
On March 13, a man filled up his tank at a gas station in Denver, USA. (Xinhua News Agency)
[Touched highs and suffered heavy setbacks]
The "Cambridge Energy Week" conference, known as the "Davos of the Energy World", was held in Houston, the United States, from the 7th to the 11th. Against the background of violent turmoil in the energy market caused by the situation in Ukraine, international oil prices fluctuated sharply last week, but still remained at a high level. The price of light crude oil futures for April delivery on the New York Mercantile Exchange and the price of London Brent crude oil futures for May delivery both rose sharply, with the intraday price of London Brent crude oil futures reaching $139 per barrel on the 7th. It was the highest in nearly 14 years and about twice the low in December last year.
However, international crude oil futures prices fell sharply on the 9th. The price of light crude oil futures for April delivery on the New York Mercantile Exchange fell by US$15 to close at US$108.7 per barrel, a decrease of 12.13%; London cloth for May delivery The price of Lrent crude oil futures fell by US$16.84 to close at US$111.14 per barrel, a decrease of 13.16%.
Regarding the international oil price plummeting by more than 10% on the 9th, Flynn, a senior market analyst at Price Futures Group in the United States, said that the news that Russia and Ukraine will conduct a new round of negotiations and that members of the International Energy Agency may release more strategic crude oil reserves have made Oil prices have eased. In addition, Otaiba, the ambassador of the United Arab Emirates to the United States, a major member of the Organization of the Petroleum Exporting Countries (OPEC/OPEC), expressed support for additional production increases on the 9th, which is another negative factor that caused the short-term plunge in international oil prices.
The UAE is one of the few OPEC members producing well below capacity. Yojie, head of energy futures business at Mizuho Securities America, said that the UAE has the ability to immediately increase its average daily production by 800,000 barrels, which is equivalent to one-seventh of Russia's average daily exports. "This is not a small number." However, UAE Energy Minister Mazrouei made a contrary statement later on the 9th, saying that the UAE is committed to implementing the agreement reached between OPEC and non-OPEC oil-producing countries, as well as the existing monthly production adjustment mechanism.
The Organization of the Petroleum Exporting Countries (OPEC/OPEC)
The ministerial meeting of OPEC and non-OPEC oil-producing countries on March 2 decided to maintain the original production increase plan in April this year and not make additional production increases. In April 2020, due to the impact of the COVID-19 epidemic, OPEC and non-OPEC oil-producing countries reached an agreement to reduce production. In April 2021, major oil-producing countries decided to gradually increase production starting in May of that year. In July 2021, major oil-producing countries agreed to increase total production by an average of 400,000 barrels per day starting in August of that year until the production cut of 5.8 million barrels per day was cancelled.
However, international oil prices rose again on the 11th. The price of light crude oil futures for April delivery on the New York Mercantile Exchange rose by US$3.31 to close at US$109.33 per barrel, an increase of 3.12%; London Brent crude oil for delivery in May Futures prices rose $3.34 to close at $112.67 a barrel, an increase of 3.05%.
S&P Global Vice Chairman Yerkin said that energy market turmoil is affecting the global economy on a scale not seen since the 1970s. Pascual, senior vice president of S&P Global, believes that the current energy security issue has received widespread attention. The Russia-Ukraine conflict, the new crown epidemic and climate change have jointly brought the energy industry to a "critical inflection point."
Affected by multiple negative effects on supply and demand, international oil prices continued to fall sharply on the 15th, closing below the integer mark of US$100 per barrel. Compared with the highs on March 8, New York oil prices and Brent oil prices have fallen by 22.04% and 21.93% respectively. Analysts believe that investors realized that Europe will not immediately reduce Russian oil demand, a turning point in Russia-Ukraine negotiations, economic growth concerns caused by the Federal Reserve's expected interest rate hike this week, and the rebound of the new crown epidemic, causing oil prices to continue to fall.
Birol, Director of the International Energy Agency
[Release oil reserves, there is still no hope of increasing production]
Birol, Director of the International Energy Agency, said on the 9th that if necessary, IEA members can release more crude oil reserves to ease oil prices Upward pressure. Birol said that the International Energy Agency's previous announcement to release 60 million barrels of crude oil reserves was an initial response to the current situation. "This only accounts for 4% of our inventories. If necessary and the member governments decide to do so, we can provide more crude oil to the market."
Birol also said that the International Energy Agency will discuss this week how to quickly reduce Petroleum Consumption has released a “ten-point action plan” focusing on the transport sector. "In the crude oil market, the most difficult months are in the summer, the so-called 'driving season' in June and July, when demand will increase."
The International Energy Agency, headquartered in Paris, France, has 31 member countries, excluding Russia. Affected by the conflict between Russia and Ukraine and severe Western sanctions against Russia, international oil prices rose above US$100 per barrel on March 1. The International Energy Agency held an interim ministerial meeting on the same day and decided to jointly release 60 million barrels of crude oil reserves, including the United States' commitment to release of 30 million barrels of crude oil reserves. This is the fourth joint release of crude oil reserves since the International Energy Agency was established in 1974. The members of the International Energy Agency have a total of 1.5 billion barrels of emergency crude oil reserves, which can be continuously released at a scale of 2 million barrels per day for 30 days.
It is estimated that 60 million barrels of crude oil is equivalent to 6 days of Russian crude oil production or 12 days of crude oil exports. However, this scale is less than market expectations. Media previously reported that members of the International Energy Agency may release 70 million barrels of crude oil reserves, and the United States may release 40 million barrels of crude oil reserves. International oil prices still rose sharply in early trading that day. After the International Energy Agency announced the release of crude oil reserves, the increase only narrowed slightly. In subsequent transactions, international oil prices continued to rise.
This is a gas station taken in Sydney, Australia on March 14. (Xinhua News Agency)
Analysts believe that if the Organization of the Petroleum Exporting Countries (OPEC/OPEC) does not change its production policy, the release of crude oil reserves by the International Energy Agency will appear to be insufficient compared with global crude oil consumption and potential supply shortcomings. The impact on the market is minimal. The actual scale of the reduction in Russian crude oil supply is still difficult to determine, and factors such as the unclear outlook for the Ukraine crisis have also increased market concerns about a further deterioration of the energy supply situation. In addition, some analysts pointed out that in addition to supply shortcomings, factors such as declining purchasing willingness, payment bottlenecks, and financing difficulties may also hinder transactions and exacerbate the rise in oil prices.
Commerzbank commodity analyst Fritsch said that affected by uncertainty, commodity consumers are increasingly reluctant to buy oil, liquefied natural gas, coal, metals and food from Russia. Fritsch said that many Russian banks have been excluded from the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system, making it more difficult to deliver payments. In addition, some Western banks have refused to finance these transactions.
Participants believed that the growth in demand in the post-epidemic era and the lack of investment in the energy industry in recent years have led to an imbalance in supply and demand, which has become an important driver of rising energy prices. On the demand side, Pascual pointed out that the global energy market experienced unprecedented demand growth last year, which challenged the balance of supply and demand, and that the market needed time to adapt to this change. From the perspective of supply, Hayes, CEO of American energy company Hayes, said that before the Russia-Ukraine conflict, the supply and demand relationship in the oil market had tightened, and global crude oil inventories had decreased for two consecutive years and were lower than the level before the outbreak.
International Monetary Fund (IMF) President Georgieva
[Inflation has been high, growth may be stagnant]
International Monetary Fund (IMF) President Georgieva said on the 10th that the Ukrainian crisis has a negative impact on the world economy. The spillover effects will be reflected in commodity prices and other aspects. It is expected that the new World Economic Outlook Report to be released next month may lower the world economic growth forecast. In January this year, the IMF predicted that the global economy would grow by 4.4% this year, down 0.5 percentage points from the forecast in October last year.
Georgieva pointed out that affected by the Ukraine crisis, the prices of energy, wheat, corn and other bulk commodities have soared, which will intensify inflationary pressure in many countries and have a greater impact on the lives of poor families; the real economy has also been affected, and trade has shrunk. , consumer confidence has declined, purchasing power has declined, etc. In addition, under high inflation, the tightening of monetary policies in many economies may accelerate, and emerging markets may face the dual pressures of tightening financial conditions and declining corporate confidence.
Data released by the U.S. Department of Labor on the 10th showed that due to factors such as rising energy, housing and food prices, the U.S. Consumer Price Index (CPI) rose 7.9% year-on-year in February, the largest year-on-year increase in 40 years. Recently, U.S. gasoline prices have soared due to the impact of the Russia-Ukraine conflict and related sanctions. Specifically, U.S. energy prices rose 25.6% year-on-year in February, with gasoline prices rising 38% year-on-year; fuel oil prices soaring 43.6% year-on-year.
French Minister of Economy and Finance Le Maire warned on the 9th that the current energy situation is comparable to the 1973 oil crisis. The crisis that year caused stagflation, "which is what we want to avoid in 2022." Data released by Eurostat on March 2 showed that affected by the sharp rise in energy prices, the inflation rate in the Eurozone reached 5.8% in February, another record high; energy prices in the Eurozone rose sharply by 31.7% year-on-year in February.
This is a price sign taken at a gas station in Berlin, the capital of Germany, on March 11. (Xinhua News Agency)
Economists expect that as the impact of the situation in Ukraine on the energy market continues to intensify, economists from market research institution Capital Economics predict that the inflation rate in the euro zone will reach more than 6% in March, and will reach the fourth level this year. It remained above 5% before the quarter. JP Morgan economists predict that the average inflation rate in the euro zone will reach 5% or higher this year, much higher than the 3.2% previously predicted by the European Central Bank. De Guindos, deputy president of the European Central Bank, believes that the situation in Ukraine will further push up prices and hit European economic growth. "The Russia-Ukraine conflict will ultimately lead to rising inflation and slowing economic growth through macroeconomic channels and its impact on market confidence and sentiment."
Analysts pointed out that the current inflation rate in the euro area is much higher than the 2% target set by the European Central Bank. , disrupting the pace of the European Central Bank's adjustment of monetary policy and putting it in a dilemma. On the one hand, the European Central Bank hopes to respond to rising inflation by tightening monetary policy; on the other hand, it is worried that tightening monetary policy will further hinder economic recovery in the context of the impact of the situation in Ukraine on the European economy.
Experts said that the main risk at present is whether severe stagflation will occur in the short term as consumer purchasing power weakens. Gentiloni, the European Commission Commissioner responsible for economic affairs, said that the crisis and the surge in energy prices may have a significant impact on the EU's economic growth. In view of the high degree of uncertainty caused by the Russia-Ukraine conflict, the EU will reassess whether to re-implement budget rules in 2023 in two months. Utmer, a senior economist at Allianz Group, said that if the West further increases sanctions against Russia, it may push the euro zone economy into recession.
(Source: Xinhua News Agency)
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