Significant decline in crude oil

Author | Qu Xinrong

Special researcher at the Yangtze River Business School, understand the app expert

The following is July 7, Teacher Qu Xinrong is understanding the applet

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Analysis of crude oil prices: The main reason for the recent decline in oil prices is the strengthening of the US dollar

Good morning, I am glad to accept the invitations of understanding, and simply communicate some volatility of crude oil with everyone. Now the entire decline is mainly dominated by the macro.

Data source: dataYES

We first look at the two aspects of industry and macro. Due to the rise in the US dollar, the risk of decline in the US economy leads to risk of crude oil. At the same time, I found that the rise of the dollar in the past two days is also very strong, so I will talk to you next.

Data source: dataYES

The first one, why is the dollar so strong now? In the US dollar index, 60%of the euro, and the other 20%are the yen, then the weakness of the euro is a major reason for the strong dollar.

Data source: dataYES

A framework for crude oil, the influencing factor of the entire crude oil price is divided into:

1) Macro demand

2) Industry supply needs

3) There are also financial markets.

The so -called US dollar stock index and government bonds of the financial market trading, in addition, there are some conflicts of geopolitics.

Now the main affecting variables are in this fluctuations in the financial market, so we see that the increase in the entire US dollar is a pressure on such as a golden image crude oil like copper. This is the current market core.

In addition, the second influence variable is the demand. We see the trend of decline in the entire United States and Europe, which is the second level of influence. But it is not entirely the reason for demand, because we see that there is no large -scale decline in the United States.

So the main problem now is the trend of the dollar.

1. The logic of the dollar

One of the main causes of crude oil fluctuations is that we said earlier, mainly because of the weak euro. The weakness of the euro is the conflict of the Russian and Ukraine War, which leads to the tension of European energy. We see the recently, the Dutch natural gas The price has once again set a new high. The price of British natural gas has been 300, which has caused the entire energy of Europe to be very tense. A transaction of restarted coal power in Germany, in addition, there are some problems like Norway's strikes, which leads to a tension of natural gas and crude oil. This is the main reason for the weak euro. In addition, the European Central Bank will start interest rate hikes in July. This is also the main reason for the decline of the European economy after the market expected after the interest rate hike, so the euro was under pressure before these signs did not alleviate.

So this is an important reason for the US dollar strong, so the second reason for the US dollar is still the Fed's policy is tight. In the face of the high inflation that the Federal Reserve has been difficult to have in the past 40 years, if the Federal Reserve wants , Then the ultra -conventional hawk, maintaining such expectations for interest rate hikes, the economy cools down.

Data source: dataYES

So now, it is currently the most worried problem in the market. At present, the unemployment rate in the United States is 3.6%. There is no obvious rise in this unemployment. Caused the economic recession, and the unemployment rate rises to about three or four, which can be borne each year. Therefore, this recession is the second layer of logic in the market and an important reason for the strong dollar.

Because the Federal Reserve's interest rate hike under high inflation, this is one of the other reasons for the strong dollar. It also led to a decline in the price of this commodity. The result of interest rate hikes will cause a significant cooling of demand. This will cause the demand to cool down. It also increases a concern of the market's risk of the decline in the demand of crude oil.

Second, the impact of actual needs

In fact, from the perspective of demand, the total demand for oil products in the United States now has the total demand for this oil product that has been announced than a price level of the same period last year. Although summer is a peak of growth in demand, But in fact, if you look at it in seasonal, the demand for oil in the United States is still lower than the same period of the previous year, especially the same period last year. Therefore, this demand may not be able to return to such one.

After the market is concerned about the Fed's interest rate hike, demand has declined, which leads to a decline in crude oil prices. Therefore, this place has to pay attention to, in this environment of interest rate hikes, the big direction in the United States and Europe will be cyclically declining, but overall, he may not have a large depression in such an economy in 2008. This is Species should not appear, because American companies and residents are relatively healthy now, but in the interest rate hike environment, to reduce inflation, it is necessary to reduce demand and cause economic landslides. This is relatively certain. Essence

Therefore, the trend of crude oil is weaker. The second is that from China, there is no particularly obvious rebound in China from China, including us. One of the characteristics of China's economy, mainly, does not engage in large water irrigation. Real estate is still a state of loose and cautious marginal policy of paranoia. Therefore, from the perspective of land acquisition and newly started data from real estate companies, it is not particularly good. Therefore, we see that the South China Industrial Product Index is falling. This suppression of the price of crude oil from macroex, so from various aspects, the global European and American economy has declined. Decomptel off this demand for Europe and the United States. Therefore, this also causes the market to worry about the market's concerns, so crude oil will be empty in this big direction.

Third, low industrial inventory

In the end, I added some of the views of the industry. At present, this industry is not a major logic of crude oil transactions. The industry is more viewed. Because the inventory of the entire industry is very low, we see that after throwing it, the US oil inventory, including the overall inventory of OECD countries, is very low. Therefore, the listing of the industry is too profitable for this oil price. And the current output, indeed the output of OPEC, can not reach the previous level. OPEC's current output is more than his expected production, which is the target output, which is as low as 200 to 3 million barrels. Therefore Essence

Therefore, from the perspective of the industry, is the downward space of oil prices particularly large, because there is such a rigid demand. Moreover, the epidemic will gradually become the past, and this economy will gradually return to this normal demand space. Therefore, in the replenishment, there is such a normal replenishment demand, so in a range of 100 to 90, the space of falling will not be great. This is an important situation. The main content is basically these.

At present, the market is a bit overly concerned about the decline, the supply and demand in the industry is still tight, and there are some very details on macro and industrial follow -up, and it is not too far -sized. The core problem is these.

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