International oil prices rose first and then fell in the past week. Finally, they rose for four consecutive weeks and then fell for four consecutive weeks. Since the beginning of this year, the performance of oil prices has almost been condensed into the fluctuations of oil prices in the past week: repeated oscillations with typical stalemate characteristics. After experiencing a sharp decline under the impact of the banking crisis in early May, the trend of oil prices in the past two weeks has shown the swing of investors’ views. In particular, in the past week, oil prices have seen several times within a narrow range of US$3.5/barrel, and the center of gravity has fallen slightly. .
Such performance of oil prices stems from the complex situation faced by the current crude oil market. After March this year, macro-negative factors such as banking crises in Europe and the United States and concerns about economic recession hit the market several times, causing oil prices to plummet. Negative macro-level factors have become the core negative factors that suppress oil prices. In order to maintain stable oil prices, OPEC+, which includes core oil exporting countries such as Russia and Saudi Arabia, once again took the initiative to voluntarily reduce production by 1.66 million barrels per day on the basis of the previous 2 million barrels per day reduction at the April meeting. Such production reduction efforts Oil prices once recovered, but due to continued pressure from negative macroeconomic conditions, investor confidence is fragile, and speculative net long positions in the crude oil market have experienced rare passive, rapid and substantial adjustments. This means that investors at the current stage have begun to hesitate in the face of complex influencing factors. .
The performance of the previous two rounds of plummeting oil prices has significantly increased investors’ concerns about the negative macroeconomic conditions. Now, the global economy is facing many difficulties, and concerns about the global economic outlook are increasing. In addition, the U.S. debt ceiling negotiations, which have made the market highly nervous, are progressing slowly. U.S. Treasury Secretary Janet Yellen on Thursday urged Congress to raise the $31.4 trillion federal debt limit to avoid an unprecedented default. If the Treasury Department is no longer able to issue bonds, the U.S. economy will suffer a “significant” hit, not to mention the impact on financial markets and institutions, as well as consumer confidence, calling the prospect “unthinkable.” A default would trigger a global recession and potentially undermine U.S. leadership in the global economy. A previous assessment document released by the White House stated that the White House Council of Economic Advisers believes that a long-term default will lead to a “doomsday scenario” similar to the Great Recession, when 8.3 million people will lose their jobs and the stock market will plummet by 45%; a short-term default will cause 500,000 people to lose their jobs. , the unemployment rate increased by 0.3%; if the negotiations are completed by the deadline (June 1), 200,000 people may be unemployed, and the unemployment rate will increase by 0.1%. In all three scenarios, U.S. economic growth will turn negative, with contractions ranging from 0.3% to 6.1%, which could lead to a recession. Although everyone still prefers to believe that the U.S. government will eventually approach the debt ceiling issue, everyone is afraid of exceptions, which has brought huge uncertainty to the market.
Overall, the current supply and demand level of the crude oil market has not deteriorated significantly. The supply side’s proactive and voluntary production cuts have balanced market behavior so that the supply and demand level has not put significant pressure on oil prices. However, under the negative influence of the macro level, investors have lowered their expectations for oil prices. expected. Affected by this, the overall risk appetite of the financial market is obviously at a low level, and the overall commodity market is in a bear market stage, which will significantly suppress oil prices. From the perspective of various influencing factors, macro factors dominate investor expectations, followed by supply and demand factors in the crude oil market. Judging from the overall trend of oil prices, the probability of breakdown of the interval oscillation pattern formed this year is increasing, and the bear market potential is gradually increasing.
In its short-term energy outlook report, EIA significantly lowered its expectations for the average price of Brent crude oil and WTI crude oil in 2023. The report predicts that the price of Brent crude oil in 2023 will be US$78.65/barrel, compared with the previous expectation of US$85.01/barrel; the price of Brent crude oil in 2024 is expected to be US$74.47/barrel, compared with the previous expectation of US$81.21/barrel. The report predicts that the price of WTI crude oil in 2023 will be US$73.62/barrel, compared with the previous expectation of US$79.24/barrel; the price of WTI crude oil in 2024 is expected to be US$69.47/barrel, compared with the previous expectation of US$75.21/barrel. The report expects seasonal increases in oil consumption and declines in OPEC crude oil production to put some upward pressure on crude oil prices in the future. The report also predicts that the growth rate of global crude oil demand in 2023 is expected to be 1.56 million barrels/day, which was previously expected to be 1.44 million barrels/day; the growth rate of global crude oil demand in 2024 is expected to be 1.72 million barrels/day, which was previously expected to be 1.85 million barrels/day. day. The report predicts that U.S. crude oil production will be 12.53 million barrels per day in 2023, which was previously 12.54 million barrels per day. U.S. crude oil production is expected to increase by 640,000 barrels per day in 2023.
OPEC’s monthly report maintains the global economic growth forecast for 2023 at 2.6% (the previous forecast was 2.6%). It focuses on the fact that the U.S. debt ceiling issue has not yet been resolved, which may have serious economic consequences, which is what the market is paying close attention to recently. Potential risk points. OPEC’s forecast for global oil demand growth in 2023 remains unchanged at 2.3 million barrels per day, and China’s oil demand is expected to increase by 800,000 barrels per day in 2023 (previous forecast was 760,000 barrels per day). OPEC oil production fell by 191,000 barrels per day in April to 28.6 million barrels per day, RussiaCrude oil production fell by 300,000 barrels per day in March to 9.7 million barrels per day. The forecast for OPEC crude oil demand in 2023 is stable at 29.3 million barrels per day, while the supply growth forecast for non-OPEC oil-producing countries in 2023 remains unchanged at 1.4 million barrels per day. Data show that in April, Angola’s crude oil production increased by 79,000 barrels/day from the previous month to 1.085 million barrels/day, Saudi Arabia’s crude oil production increased by 95,000 barrels/day from the previous month to 10.5 million barrels/day, and Iran’s crude oil production increased by 48,000 barrels/day. barrels/day to 2.63 million barrels/day. Nigeria’s crude oil production decreased by 170,000 barrels/day from the previous month to 1.18 million barrels/day, and Iraq’s crude oil production decreased by 203,000 barrels/day from the previous month to 4.139 million barrels/day. Iraq said it would voluntarily cut oil production by 211,000 barrels per day starting in May, but the reality is that due to the closure of a key pipeline, the country has reduced production by nearly 450,000 barrels per day.
From the perspective of supply and demand in the crude oil market, the demand side is facing the pressure of the global economic recession. In particular, the outlook for the European and American markets is relatively pessimistic. The world is placing its hope on the continued strong demand in the Asia-Pacific region, led by China, India, etc. This is reflected in the EIA and OPEC monthly are reflected in the report. Judging from the current performance of the Chinese and Indian markets, it is relatively in line with market expectations. However, we should also pay attention to the lack of bright spots on the demand side in China in the near future. We need to be alert to the spread of the negative impact of the global economy on the demand level. In the future, oil prices will continue to face negative macro effects and supply. It is a direct game to reduce production and maintain stability.
Although oil prices have been under overall pressure and have fallen back in the past week, the overall performance of the refined oil market in Europe and the United States has been stronger than that of crude oil. Cracking profits have been restored. The monthly difference in the crude oil market has also been relatively stable. The supply and demand aspects have not put significant pressure on oil prices. At the macro level, market confidence continues to be affected. Last week, another core commodity, copper, experienced a sharp decline. Domestic industrial products fell under overall pressure, market risk appetite cooled, investor confidence was obviously insufficient, and oil prices also maintained a weak oscillatory downward pattern. At present, investors’ opinions may swing at any time, and the trend of oil prices is poor. Pay attention to the rhythm and control risks.