The hottest oil price harms the real economy, and

High oil prices have increased upward pressure on the real economy

NYMEX crude oil futures performed strongly this month, breaking the $120 mark and hitting a record high of $135. Factors such as supply concerns, the weakening of the US dollar and the unexpected decline in inventory data stimulated the rise of crude oil. There was a correction in the high level at the end of the month, and market hot spots changed. High oil prices triggered the market's expectations of the recession of the entire economy, consumer confidence fell, and concerns about the slowdown in demand led to the decline in oil prices

many people in Singapore reacted that the extension plan was not tight, 180CST fuel oil followed the rise of US crude oil, and there was also a correction at the end of the month, with a maximum increase of 20%, which was stronger than the external crude oil. After breaking through the 4600 yuan mark in the internal market this month, it rose to a new high

I High oil prices have a huge impact on the global macro-economy, with signs of stagflation emerging, consumer confidence index falling to a trough

crude oil prices rose strongly to $135 this month, and a pessimistic atmosphere enveloped the global financial markets. The high oil price swallowed up the profits of enterprises, causing the market to worry about the economic outlook, and major global stock markets fell sharply. Other major commodities were boosted by crude oil, the prices remained high, and inflation rose, making the global economy just hit hard by the subprime mortgage even worse. Consumption, the main indicator driving U.S. economic growth, was weak, and consumer confidence fell to a 15 year low

consumer confidence index and crude oil price trend chart. (source: CSC futures)

II The dollar and crude oil interact, and the future market will still maintain a basic relationship

for a long time, oil prices have maintained a good negative correlation with the dollar, but this relationship has changed after the oil price broke through $120 this month. The impact of the rebound of the US dollar on crude oil is weakened, and the situation of both rise and fall often exists, which will further stimulate the rise of oil prices when it weakens. Even the trend of the US dollar was in line with that of crude oil. The high oil price seriously damaged the fundamentals of the US economy, and the US dollar fell in response. At the end of the month, affected by consumer concerns, oil prices fell sharply, and the dollar also rebounded sharply, encouraged to some extent

trend chart of the relationship between us dollar index and crude oil price. (source: CSC futures)

in the face of the signs of stagflation in the economic system, the authority of the Federal Reserve made more reference to the inflation factor than the economic recession, and the market had expectations for raising interest rates. At the same time, the impact of the subprime mortgage is spreading globally, and the dollar fundamental data has a relative advantage. The later rebound will still play a role, which can depress the oil price through the volume experiment

III Supply eased somewhat this month, and insufficient investment in production capacity limited the growth of supply

according to statistics, OPEC exports fell by 700000 barrels per day month on month in April, mainly affected by the situation in Nigeria, which also stimulated the continuous rise of oil prices at the beginning of this month. However, by the middle of this month, Nigeria's production has increased from 1.86 million barrels per day to about 2.05 million barrels per day, Saudi Arabia has also increased production by 300000 barrels per day, and the export of oil fields in northern Iraq is also expected to increase by 120000 barrels per day this month. After two months of production decline, OPEC's production is expected to increase in May. 2. It is expected to grow in the chemical industry. IEA predicts that the output of non OPEC countries will increase by about 680000 barrels in 2008, but the current production capacity increase is limited. The data released in April shows a decrease of 130000 barrels compared with March. The oil fields in Mexico and other countries are aging, and Russia's output is also facing a decline this year

opec crude oil production trend chart. (source: CSC futures)

it is estimated that the output trend of non OPEC countries in 2008. (source: CSC futures)

this month, the Deputy Prime Minister of Iraq said that the actual oil reserves after survey and data statistics should be three times the current published data, reaching 350billion barrels, thus surpassing Saudi Arabia by 264billion barrels, becoming the world's largest oil storage country; Brazil said that after the discovery of a huge amount of oil fields in November last year, another huge oil field with reserves of 33billion barrels was found offshore, which is expected to become a major exporter in the world. At present, the oil shortage does not exist, but these countries are seriously under invested in production capacity due to political and economic influences, and cannot keep up with the growth rate of demand

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