The hottest oil price has been difficult to reboun

Oil prices have been difficult to rebound significantly

oil prices have been difficult to rebound significantly

October 09, 2008

[China paint information] affected by the U.S. financial crisis, coupled with weak global demand, international oil prices tended to fall in fluctuations from the end of September to 1012 and the beginning of the last month. It fell by more than $20 in two weeks. European benchmark crude oil futures were close to $80 a barrel, while American benchmark crude oil futures fell below $90. The rare increase in the oil market in the first half of the year has disappeared

the U.S. financial crisis has made people worry that the worst financial period after the great depression may come. As of the week of October 3, the prices of oil, copper and grain futures fell by the deepest in 50 years. Panic, risk aversion and clearance have become the characteristics of the oil futures market, which has also been extended to other commodity futures markets. The Reuters/Jeffrey CRB index, which reflects the price fluctuations of 19 commodity futures, fell 28% to 343.22, its biggest decline since 1956. The UBS Bloomberg CMCI index, which includes 26 commodities, is also the worst week in 10 years, reflecting people's doubts that the U.S. market rescue policy is not enough to stimulate economic growth and reverse the weak commodity demand

the oil futures market is closely related to the financial market. Global stock markets fell sharply, and economic concerns forced traders to sell from commodity futures

the exchange rate of the US dollar rose, some investors withdrew from commodity futures, and the market re focused on fundamental changes. Although OPEC crude oil supply fell in September, it is still at a high level compared with recent years. According to the U.S. energy information administration, despite the decline in Saudi Arabia's crude oil production in September, the daily average production is still 900000 barrels higher than that of the same period last year, while OPEC's daily crude oil production is 1.3 million barrels higher than that of the same period last year

the US market rescue plan was passed by both houses of Congress, and central banks of all countries joined hands to reduce interest rates to curb the unprecedented global market turmoil, which means that the financial crisis may be alleviated. But rescuing the market is difficult to boost weak market demand. Affected by high oil prices and the economic downturn, U.S. oil demand has been 8.6% lower than the same period last year. The total daily average demand for refined oil in the United States is 18.341 million barrels, which is the lowest demand in seven years. In October, gasoline demand in the United States fell to the lowest level since September 2005, nearly 10% lower than the same period last year. In the past four weeks, gasoline demand in the United States has been 6.2% lower than that in the same period last year, which is the four week average of gasoline demand falling for 35 consecutive weeks. In Northeast Asia, some naphtha cracking units have been shut down, and the demand for naphtha, an important chemical raw material, has been weak. Since this year, naphtha prices have been seriously inversely linked to crude oil prices, finished oil inventories have increased, and consumer countries such as South Korea and Japan, which are mainly crude oil importers, have also reduced crude oil processing

with the sharp decline in gasoline demand due to winter, Japanese refineries will cut gasoline production in November. At this time in previous years, the refinery reduced the production of gasoline and increased the production of kerosene for heating in winter. However, due to energy diversification, under the influence of high oil prices, energy conservation and improving energy efficiency have also reduced the demand for kerosene in Japan and South Korea. Showa shell oil company of Japan plans to cut the output of oil products by 4.4% from September to the end of this year; At the same time, kozmo oil company reduced its production in the fourth quarter by 2% year-on-year; The company reduced its crude oil processing volume in the fourth quarter by 14% year-on-year

the U.S. energy information administration lowered its forecast for world oil demand this year. It is expected that the world's oil consumption will increase by 300000 barrels a day in 2008 and 800000 barrels a day in 2009. This year's oil demand fell by nearly 350000 barrels compared with last month's report, saying that this was taking into account the deteriorating global economic situation. The report said that strong oil growth in countries and regions outside the OECD, especially oil exporting countries in China, Latin America and the Middle East, partially offset the sharp decline in oil consumption in the United States and many other OECD countries

oil and gas production in the Gulf region of the United States affected by the hurricane slowly recovered. As of Wednesday, offshore platform operations in the Gulf region of the United States had resumed by 56.5%. According to the latest statistics of the U.S. mining service on Wednesday, 43.5% of crude oil production and 38.6% of natural gas production of oil and gas companies in the Gulf of Mexico were closed. This means a daily output of 565793 barrels of crude oil and a daily loss of 2.86 billion cubic feet of natural gas. In addition, statistics also showed that oil companies withdrew employees from 85 production platforms, accounting for 12% of the 649 named platforms in the Gulf region of the United States. The latest survey results show that Hurricane Ike was a category 2 hurricane when it made landfall on the coast of Texas on September 13, destroying 54 production platforms. In addition, 95 damaged platforms can only be restored after months of maintenance

restricted by the tight credit market, speculators may have withdrawn a large amount of funds from commodity futures. According to the latest formula released by the U.S. Commodity Futures Commission, the position of large speculators in crude oil futures has fallen to the lowest in two years. As of the week ended September 30, speculators' positions in crude oil futures on the New York Mercantile Exchange fell by 20977 hands over the previous week, the lowest level since July 2006. Meanwhile, the net long positions held by speculators in crude oil futures on the New York Mercantile Exchange fell to 40093 from 41728 in the previous week

due to the increase in imports after the hurricane, although the operating rate of refineries increased significantly, it was still low compared with the same period in history. According to the statistics of the U.S. Department of energy, the U.S. crude oil inventory increased by 8.1 million barrels in the week ended October 3, rising to the upper average level in the same period in history. At the same time, U.S. gasoline inventories increased by 7.2 million barrels, but still lower than the historical average for the same period

Asian crude oil spot market: Although the November shipment has not been traded, the Middle East high sulfur crude oil spot market has begun the December shipment trading. It is said that at least two shipments of crude oil loaded in Oman in December were traded at their official price parity. Recently, the founding meeting of Oman's National Advisory Committee of experts on the development of crude oil new materials industry was held in Beijing on the 28th, with an estimated discount of about $2/barrel compared with the benchmark Dubai crude oil price. Oman crude oil futures for the first month have fallen below $75 a barrel. Most crude oil exporting countries in Asia and the Middle East have announced official sales prices. With the sharp decline of western crude oil futures and the evaluation price of Asian benchmark crude oil, the official sales price of retrospective crude oil fell for the second consecutive month in September, while the difference between the contract price of crude oil and the benchmark crude oil in November in some oil producing countries in the Middle East also fell. The official price of crude oil in Oman in January was determined to be $95.88/barrel, down $17.25 from the official price in October, a seven month low, and the first time in six months that it was below the important psychological threshold of $100/barrel. The benchmark Dubai crude oil evaluation price averaged US $95.904 per barrel in September, US $16.952 lower than the average price in August. Saudi Arabia has lowered the official sales prices of various crude oils, and Kuwait and Iran are expected to also reduce the official sales prices. In view of the weak market for light and high sulfur crude oil, the price difference between Murban crude oil and benchmark Dubai crude oil has also been reduced. The retrospective official sales price of Murban crude oil in September was $2.15 higher than the benchmark Dubai crude oil per barrel, which was the lowest price difference since May 2004 and narrowed by $1.49 compared with the price difference in August. Qatar Petroleum Company has retroactively lowered its official crude oil price in September to a seven month low. After two consecutive months of discount trading in the spot market, the Asian market is looking forward to a deep price reduction. In South Asia, the contract price of low sulfur crude oil has also been significantly reduced. The retrospective official selling price of Indonesian intermediate Minas crude oil in September was $101.95 per barrel, down $16.76 from the official price in August 2008. The official selling price of Malaysian Tapis crude oil in September was US $106.92 per barrel, the lowest level in six months

recent international oil market forecast: the U.S. Energy Agency said in its report that despite the recent sharp decline in oil demand and oil prices, the oil market is expected to remain relatively scarce. Because output growth is sluggish. It is expected that the average barrel of West Texas Intermediate base crude oil in 2008 and 2009 will be about $112 after removing the wrapping paper and the bundled string

Evans, a futures analyst at Citibank, believes that it is not surprising that crude oil futures on the New York Mercantile Exchange fell below $90, because the financial market is in trouble and the oil demand data continues to be weak. If U.S. demand falls further, NYMEX crude oil futures may fall to $per barrel or less in the long run

Philip verleger, an independent oil analyst who recently joined the haskayne School of business at the University of Calgary, said in an interview on October 2 that if our economy really declines seriously, the oil price will fall below $50. The economic downturn is not just in the United States, but in the world. Oil prices also depend on whether OPEC can implement production quotas and restrict supply. If OPEC adopts control policies, oil prices will rise, otherwise oil prices will fall

verleger even said alarmingly, "if we really fall into the abyss, although I don't think so, the oil price may fall to $10."

however, Anthony Nunan, assistant general manager of risk management at Mitsubishi Corporation in Tokyo, believes that oil prices falling to $50 a barrel may hinder investment. Due to the current credit crisis, some projects have been delayed. In the long run, this is good for the market, because the shortage of supply has continued

a ping believes that the situation of oil market with abundant supply and weak demand has been extended from Europe and the United States to Asia, and it is difficult for international oil prices to rebound significantly under the influence of weak fundamentals. At the same time, under the heavy pressure of the financial crisis of large investors, oil futures are also difficult to be used as a means of hedging. Perhaps OPEC will further reduce production and curb the excessive decline of international oil prices