International oil prices have rarely fallen during the year, will they rise again?

With the continued geopolitical tensions and the increasingly severe inflationary situation, international oil prices have been running
at a high level.

But in recent times, oil prices have plunged frequently
.
In June, New York futures and Brent futures fell nearly 8% and 11%,
respectively.

For the first time in the year, there was a single-month decline, will international oil prices rise again?

Many factors caused oil prices to fall

There are several reasons for the recent decline in oil prices:

On the one hand, the tightening of global central banks, the intensification of investor fears of a global recession, and the weakening of the outlook for crude oil demand have put downward pressure
on oil prices.

On the other hand, OPEC+ reconfirmed at the 30th ministerial meeting to maintain the previously announced production quota adjustment plan, and decided to increase the daily crude oil production quota in August by 648,000 barrels, returning nominal oil production to pre-epidemic levels
.

After the announcement of the increase in production, international oil prices have declined
.

Amos Hochstein, senior adviser on U.
S.
energy security, then said the U.
S.
expects the OPEC+ plan to increase production by 648,000 bpd in July and August as the "first step" of its supply policy, followed by
a "second step.
"

As consumers suffer from soaring oil prices, the United States is desperate for oil prices to cool
.
To this end, the United States has repeatedly released strategic crude oil to increase marginal supply and curb the rise in
oil prices.

As the recurrence of the epidemic and rising inflation disrupt crude oil demand, the US gasoline demand is now showing signs of weakness, and the market outlook is difficult to be optimistic, resulting in a downward trend
in oil prices.
Coupled with the fact that the current market has greatly digested the impact of the Western oil ban, the slowdown in oil supply worries has further helped oil prices cool
.

The supply shortage has intensified

Despite recent fluctuations in oil prices, the continued tightening of crude oil supplies should intensify
in the long run.

According to a study by Rystad Energy, a Norwegian energy consultancy, the total amount of global recoverable oil is now down 9% from last year, which could deal a major blow
to global energy security.

According to the analysis of Wise, the total amount of recoverable oil in the world is currently estimated at 1.
572 trillion barrels, which is 152 billion barrels
less than the total in 2021.

The U.
S.
Energy Information Administration (EIA) also said that global crude oil excess capacity in May was less than half
of the 2021 average due to Western sanctions.
Non-OPEC spare capacity as of May fell 80% year-on-year, with OPEC's spare capacity falling to 3 million bpd from 5.
4 million bpd
in the year-ago quarter.

"We need more oil to meet the growing demand for transportation, and any action to limit supply will soon have a detrimental effect
on global gasoline prices.
" Per Magnus Nysveen, head of analytics at Wise, said
.

Will it rise again in the future?

Although the recent brief correction in oil prices has aroused a lot of attention, the trend of rising international oil prices this year cannot be ignored
.

In the first half of this year, the average price of WTI crude oil rose by $39.
30 per barrel from 2021, an increase of about 63.
17%; The average price of Brent crude oil is up $39.
35 or about 60.
32%
from 2021 per barrel.

Will international oil prices rise again in the future?

A number of institutions believe that in the medium and long term, international crude oil is still showing a lack of supply elasticity, and oil prices will remain high in the future
.

First of all, although OPEC+ announced an increase in production, many parties are skeptical
of its ability to increase production because its main members, Saudi Arabia and the United Arab Emirates, are close to the limit.

Secondly, the current supply chain bottleneck of shale oil in the United States limits the ability of crude oil in the United States to put into production, and the marginal increase in the supply side of each oil product is limited or promotes the price of various oil products to rise
more than expected.