What Is The Market Worrying About When International Oil Prices Are Reversed? How Does The Energy Structure Change?

Since November, the international oil price shocks have risen slightly, but in November 29th, the closing price of international oil prices dropped sharply. The price of light crude oil futures delivered in January 2020 on the New York Mercantile Exchange fell by 2.94 US dollars, closing at 55.17 US dollars per barrel, or 5.06%. What are the recent factors that are stirring up the price of crude oil? How does the energy structure change in the context of increased production and slow demand?

In December 2nd, CCTV financial review invited. Professor Dong Xiucheng, National Open Institute of University of International Business and Economics and Financial commentator Wan Zhe Commenting.

What is the market worrying about the volatility of oil prices?

News background:

International oil prices fell significantly in November 29th. As of the close of the day, the New York Mercantile Exchange delivered light crude oil futures in January 2020, down 2.94 US dollars, closing at 55.17 US dollars per barrel, or 5.06%.

Brent crude oil futures for January 2020 delivery fell 1.63 US dollars to close at $62.43 a barrel, or 2.54%.

Dong Xiucheng: political turmoil in the Middle East is the main cause of oil price fluctuations.

Professor Dong Xiucheng, National Open Institute of University of International Business and Economics, Judging from November, the volatility of international oil prices is increasing. But from the whole year's trend, the main reason for the overall impact on international oil prices is geopolitics. For market participants, geopolitical factors bring uncertainty to the crude oil market, causing oil prices to continue to fluctuate.

Wan zhe: the internal contradiction is still difficult to reduce the yield agreement.

Financial commentator Wan zhe: This week, OPEC and Russia will hold a meeting in Vienna. The market is also waiting to see whether it can decide on an agreement to extend oil production cuts.

In my view, there are some contradictions within the original, and some of the original agreements have not been fully implemented. We also need to consider the factors such as the initial public offering and so on.

How does production pattern increase and demand slow?

News link:

Data show that oil exports in the United States increased 18% in September, about 8 million 760 thousand barrels a day, and oil imports fell 12%, about 8 million 670 thousand barrels a day, or nearly 90 thousand barrels a day. This is the first time since the United States began to import and export statistics in 1949, it has achieved the oil trade surplus for the first time and has become a net exporter of petroleum.

Dong Xiucheng: US oil export capability is still variable.

Professor Dong Xiucheng, National Open Institute of University of International Business and Economics, Although the United States has achieved oil trade surplus in one month, I judged that the United States is still a net importer of oil in the whole year.

With the development of shale oil technology innovation, the output of crude oil is increasing, but the output is also closely related to the economic situation. Overall, global economic growth is facing downward pressure, so the US oil export capability is still variable.

Dong Xiucheng: the pattern of oversupply of oil is hard to shake.

Professor Dong Xiucheng, National Open Institute of University of International Business and Economics, Overall analysis, crude oil price depends on supply and demand. Under the background of weak growth in the global economy, the demand for crude oil is also slowing down, and the pattern of oversupply of oil is hard to shake.

Wan Zhe: the economic outlook is uncertain. Oil price outlook is dim.

Financial commentator Wan zhe: The outlook for the world economy is uncertain. The global auto sales and manufacturing indexes are in a recession. Some automobile manufacturers are also taking the action of layoffs. Under this background, the future of international oil prices may be a bit dull.