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    Home > Chemicals Industry > Petrochemical News > Worried about the global recession, the collapse of international oil prices...

    Worried about the global recession, the collapse of international oil prices...

    • Last Update: 2023-01-08
    • Source: Internet
    • Author: User
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    On Monday, August 15, international oil prices plunged
    .
    Brent oil fell 4.
    77%, and New York crude fell 4.
    6%.

    After hitting a stage high in early June, the two oils have plummeted and have now completely erased all gains since the Russia-Ukraine conflict in February this year
    .

    Saudi Arabia increases production //

    The most immediate reason for the decline was that the CEO of oil giant Saudi Aramco said the company was ready
    to increase production.

    Saudi Aramco's CEO said last Sunday (Aug.
    14) that if needed, Saudi Aramco can produce oil at maximum capacity, and continued investment in the oil industry is necessary, and Aramco can increase production to 12 million b/d
    at any time requested by the Saudi government.

    In addition, Saudi Aramco's capital expenditures in 2023 are expected to be higher than in 2022, and Aramco will continue its efforts to increase its maximum sustainable crude oil capacity from 12 million b/d to 13 million b/d by 2027, while efforts to increase multi-energy production, oil and gas expansion, and research and development of low-carbon energy solutions continue
    .
    Saudi Aramco believes that even if the world wants to move away from fossil fuels, demand for its oil and chemicals will remain high
    .

    Saudi Aramco "expects oil demand to continue to grow over the next decade, despite downward pressure on the short-term global forecast.
    "
    The Saudi Aramco CEO said global oil demand continues to be "healthy" and if jet fuel demand picks up to pre-pandemic levels, "it will create a significant supply shortage in the market.
    "

    However, the deeper reasons are based on expectations
    of a slow global economic recovery and weaker demand.

    Global Recession //

    U.
    S.
    gross domestic product fell 0.
    9 percent on an annualized basis in the second quarter of this year, marking the second consecutive quarter of contraction, constituting a technical recession
    in the usual sense, according to the Commerce Department.
    There have been 10 technical recessions in the United States since 1949, and all of them have been officially recognized as recessions
    .

    On Monday, Seth Carpenter, chief global economist at Morgan Stanley, wrote that the clouds of a global recession are gathering
    .
    In the second quarter of this year, the US economy fell into a "technical recession"; Europe is affected by the limited flow of natural gas, and the recession in the euro area has intensified
    .

    Morgan Stanley has cut its global economic growth forecast for 2022 to 2.
    5 percent, about 0.
    5 percentage points below consensus expectations and 0.
    4 percentage points
    below the bank's forecast of 2.
    9 percent in May, Carpenter said.

    Consumer confidence fell for the third consecutive month in July, falling to its lowest value
    since February 2021, as inflation remained high and U.
    S.
    consumers became more pessimistic about the economic outlook, according to data released recently by the Big Business Research Institute, a market analyst.

    Not only is the United States at risk of recession, but the eurozone is also
    doomed.

    According to a recent survey, economists surveyed said the risk of recession in the eurozone has reached its highest level since November 2020, rising from 45% to 60%, up from 20%
    before the outbreak of the Russian-Ukrainian war, economists surveyed said that the risk of recession in the eurozone has reached its highest level since November 2020.
    Germany, one of the countries most vulnerable to cuts in Russian gas supplies, could see its economy stagnate
    as early as this quarter.

    UBS analysis shows that the market is not optimistic about the prospects of world economic growth, coupled with the strengthening of the US dollar and other factors, the support of international oil prices in the first half of the year due to geopolitical tensions, capacity constraints, insufficient investment and other factors weakened
    .
    In the event of a deep recession in the world economy, commodity prices, including international oil prices, may fall
    further.

    In fact, it's not just oil prices that have plummeted, but most base metals have also been falling
    recently.

    Comex copper prices have fallen more than 25%
    since hitting record highs in April.

    London aluminum is down nearly 30%
    from its all-time high in March.

    However, some market participants said that the largest release of oil reserves in the history of the United States may end, which will become an uncertain factor
    affecting the future trend of oil prices.
    US President Joe Biden announced on March 31 that he will release 1 million barrels of oil per day from the US Strategic Petroleum Reserve in the next six months, with a cumulative release of 180 million barrels, in response to the shortage of supply and high oil prices
    .


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