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Since mid-March, international crude oil prices have continued to fall into a trend of convergence and consolidation, as the market’s long and short news continue to be in a see-saw
.
On the one hand, the global economic recovery trend has promoted the demand outlook to continue to pick up.
In fact, the current premium spread of North Sea Brent crude oil relative to Dubai crude oil has reached the highest level in 16 months since the end of 2019.
This shows that there is already a relative surplus of crude oil supply in the Middle East, so that it must be traded in the international market.
The price of Brent crude oil is obviously lower than that of the benchmark Brent crude oil to be sold, but once its price concession reaches a certain level, it will also trigger international buyers to shift their purchasing direction, which will trigger the next round of chain reactions in the global oil market sooner or later
.
Earlier this month, OPEC and its allies agreed to restore the production capacity of 2 million barrels of crude oil a day by July, so as to gradually lift the production restriction measures since the outbreak of the epidemic last year and pave the way for the final production capacity to return to the right track
.
OPEC made such an arrangement because they are confident that the further promotion of the vaccine will further increase the level of global economic activity
This is in sharp contrast with the previous pattern
.
For most of the second half of 2020, the price difference between Brent crude oil and Dubai crude oil is negligible, and the price of the latter has occasionally turned upside down
However, the high price difference cannot be maintained for too long, because the competitive pressure of sellers has begun to pass
.
Since last week, oil-producing countries such as Angola and Nigeria in West Africa have also followed up to lower crude oil export prices, and some contracts have even dropped to new lows since November last year
Analysts pointed out that the current price difference between Brent and Dubai crude oil may also be a positive factor for the Middle East oil-producing countries, which play a leading role in OPEC, to take the opportunity to expand their global market share
.
However, the flexibility of both buyers and sellers in the market also means that the pattern of high Brent benchmark oil prices will not continue.
