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    Home > Chemicals Industry > Petrochemical News > Macro bearish triggers panic sell-off Oil prices plunged sharply

    Macro bearish triggers panic sell-off Oil prices plunged sharply

    • Last Update: 2023-02-16
    • Source: Internet
    • Author: User
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    On Friday (June 17), the price of international crude oil futures fell sharply, falling more than $10 during the session
    The main contract of U.
    WTI crude oil futures settled at $107.
    99 per barrel, down $9.
    60 or 8.
    16%; The main contract for Brent crude futures settled at $113.
    12 a barrel, down $6.
    69 or 5.

    The market is mainly affected by macro bearish factors, panic has led to a sharp drop in oil prices, and the market is generally worried that interest rate hikes by central banks in major economies may slow down the global economy, and energy demand is expected to

    Have oil prices peaked? Can it return to the upward channel in the short term?

    The root cause of this round of oil price decline is also high global inflation
    Inflation in the United States exceeded expectations in May, with the CPI soaring to 8.
    6% year-on-year, and the Fed's 75 basis point interest rate hike also set a record
    This has led to further heightened fears of a global recession, coupled with the uncertainty of the pandemic, and market expectations have changed
    The dollar soared again, risk assets sold off again, and stocks and commodities fell
    Crude oil bore the brunt, already at a relatively high level in history, and with the supply tightness not turning, panic gave oil prices a heavy blow

    Crude oil analysts believe that the current round of oil price decline is mainly the resonant impact of the general decline in the stock market and commodities, commodity prices are generally at historical highs, the market has a wind, a wide range of shock pullback is also inevitable
    However, fundamentals in key areas such as crude oil and agricultural products have not been reversed, especially the tightening of supply due to the Russia-Ukraine war, so it is expected that it will take time
    to peak or reverse the downward trend.

    From the supply side, the OPEC and its allies (OPEC+) are still conservative in their current production increase policy, although OPEC+ said that it will respond to Biden's request to increase oil production, but considering the political turmoil in some member countries and the difficulty of increasing production, OPEC+ spare capacity is stretched
    Moreover, Russian oil production is still declining, and the overall supply of the market will remain tight
    in the future.

    In addition, U.
    shale oil production has not increased as much as the market expected, with the latest EIA report showing that U.
    crude oil production reached 12 million b/d, which is still far from
    the pre-pandemic high of 13 million b/d.
    On the contrary, after the market in the United States opened the driving season, gasoline consumption increased sharply, power shortage heated up, last week US President Biden declared the country into an energy emergency, "power shortage" or trigger a new energy crisis
    in the United States.

    On the demand side, the market generally expects that the current short-term market demand is still strong
    The U.
    summer driving season will still bring steady increments
    to the oil market.
    Gasoline prices have risen along with demand, and last week the White House held an emergency meeting on refinery capacity today, and the United States has been releasing about 7 million barrels of oil a week in an attempt to cool refined oil prices, but oil market inventories still show tight
    In addition, the easing of the epidemic in Asia and the easing of restrictions will also lead to moderate demand growth
    in the short term.
    The uncertainty of demand lies in the medium to long term, and interest rate hikes by many central banks around the world put pressure
    on remote demand.
    This may weigh on
    oil prices for a longer period of time.

    Taken together, the oil price environment has become more complex, and the market may intensify volatility and amplitude
    But without a shift in supply tightness expectations, oil prices are likely to continue to challenge previous highs

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