International oil prices are rare to fall during the year, will it still rise again?

With the continuous tension of the geopolitical situation and the increasingly severe inflation situation, international oil prices have been operating high.

But in the near future, oil prices have dived frequently. In June, New York Oil and Brent oil fell nearly 8%and 11%, respectively.

For the first time in a single month, will international oil prices rise again?

Multiple factors cause oil prices to fall

There are many reasons for the recent decline in oil prices:

On the one hand, global central banks are tightening, investors worry about the global economic recession, the prospects of crude oil demand weaken, and downward pressure on oil prices.

On the other hand, OPEC+once again confirmed to maintain the previously announced production quota adjustment plan at the 30th Ministerial Meeting, and decided to increase the daily output quota of crude oil in August 648,000 barrels to restore the nominal oil production to the level before the epidemic.

After the announcement of the increase in production, international oil prices have fallen.

AMOS Hochstein, a senior energy security consultant in the United States, immediately said that the United States hopes that OPEC+July and August will increase production by 648,000 barrels per day as the "first step" of its supply policy, and then there will be "second steps" to follow up.

As consumers suffer from oil prices, the United States urgently hopes that oil prices will cool down. To this end, the United States has repeatedly released strategic crude oil to increase marginal supply and suppress the rise in oil prices.

Due to the repeated epidemic and the intensification of inflation to disturb crude oil, the demand for gasoline in the United States has now shown signs of weakness, and the market prospects are difficult and optimistic, resulting in the decline in oil prices.

In Russia, despite the frequent sanctions, its oil production in June has not decreased.

According to reports, Russia's oil output increased by nearly 5%in June to 1.46 million tons/day (10.7 million barrels/day). In addition, the current market has greatly digested the impact of Western oil ban on Russia, and the concerns of oil supply slowly slowed down and further helped oil prices to cool down.

The supply is tight and exacerbated

Although oil prices have fluctuated in the near future, in the long run, the continued tight supply of crude oil supply should increase.

Rystad Energy, Norwegian Energy Consulting, has shown that the current total amount of petroleum can be reduced by 9%from last year, which may have a major blow to global energy security.

According to Ruiliu's analysis, the total global mining oil is estimated to be 157.72 trillion barrels, which is 152 billion barrels less than the total amount in 2021.

The US Energy Information Administration (EIA) also said that due to Western sanctions on Russia, global crude oil production capacity was less than half of the average value of over 2021 in May. As of May, the non -OPEC idle capacity decreased by 80%year -on -year. OPEC's spare production capacity dropped from 5.4 million barrels per day in the same period last year to 3 million barrels/day.

"We need more oil to meet the growing demand for transportation, and any actions that restrict supply will soon have a adverse effect on global gasoline prices," said Ruizhan's analysis director Per Magnus Nysveen.

Will it rush to rise again in the future?

Although the recent brief return of oil prices has attracted a lot of attention, the rise of international oil prices this year cannot be ignored.

In the first half of this year, the average price of WTI crude oil rose 39.30 US dollars per barrel in 2021, an increase of about 63.17%; the average price of Brent crude oil increased by 39.35 US dollars per barrel in 2021, an increase of about 60.32%.

Will international oil prices be rising again in the future?

Many institutions analyze that in the middle and long term, international crude oil still shows a state of lack of elasticity, and oil prices will remain high in the future.

First of all, although OPEC+announced its production increase, because its main member Saudi Arabia and the UAE's production capacity are close to the limit, many parties have skeptical attitudes towards their production capacity.

Secondly, the current bottleneck of the supply chain in the United States shale oil is limited to the production capacity of US crude oil. The marginal incremental increase in the supply end of the oil products is limited or the prices of various types of oil products are expected to increase.

Third, under the current geographical situation, Russian oil uncertainty has intensified. At present, the Seven Kingdoms Group has agreed to set up the upper limit of the price of Russian oil and natural gas imports. It is studying a complex mechanism to limit the price of Russian oil. The chain reaction generated may further push the oil price.

Kim Lianchuang predicts that Western countries have a concern for Russian oil and gas setting up the price limit and some oil -producing countries' turbulent political situations, or the concerns of crude oil supply, which keeps oil prices high.

JPMorgan Chase believes that Russia has the ability to cut daily crude oil output by 5 million barrels without excessive damage to the economy. However, for most other parts of the world, the result may be catastrophic: if the US and European sanctions have prompted Russia to implement retaliatory reduction, global oil prices may reach $ 380 per barrel.

(Source: Shangguan News)

【Edit: Shang Pei】

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