Will international oil prices continue to rebound after a continuous decline?
2023-05-23
Recently, international oil prices have continued to decline. Since mid April, oil prices have continued to fluctuate and decline, dropping from above $80 per barrel to around $70. Despite occasional pullbacks during this period, the impact of macroeconomic factors on investor sentiment still puts pressure on the market, and the overall downward trend of oil prices remains. Under the interweaving of long and short periods, where will the balance of crude oil supply and demand lean? Will oil prices rebound? From mid April to early May, oil prices continued to decline. An Jing, a crude oil analyst at China Merchants Futures, pointed out that this is mainly due to the market's full expectation of the "OPEC+" production reduction plan. After the positive impact gradually weakened, traders once again focused on the macro and demand levels. The market is worried that interest rate hikes in Europe and America will lead to a recession, and economic weakness will ultimately be transmitted to terminal oil consumption. Therefore, the demand expectation is lowered, which will suppress oil prices. Currently, global macro risks continue to ferment, and economic downward pressure is evident. Taking the United States as an example, on the one hand, the issue of the US debt ceiling is still pending, and the potential risk of default has raised investors' concerns about the economic outlook. On the other hand, US consumer spending has slowed down. The United States Department of Commerce reported that US retail sales rose 0.4% month on month in April, lower than the 0.8% expected. This further exacerbates investors' concerns, leading to pressure on oil prices. Under the catalysis of risk, there have been many adjustments in oil prices. The current macroeconomic situation is complex, does this mean that oil prices will continue to decline? In fact, despite the continuous macroeconomic bearish factors, considering the tightening supply and demand prospects of the crude oil market, many institutions still believe that oil prices are expected to rise. On the one hand, market research firm Kpler data shows that Saudi Arabia's crude oil exports in May are expected to be approximately 6.48 million barrels per day, a decrease of 1.1 million barrels per day compared to April, supporting oil prices. The news that OPEC's crude oil production in April decreased by 191000 barrels per day compared to March was also positive for crude oil. On the other hand, the US Energy Information Administration, the International Energy Agency, and OPEC have all raised their oil demand expectations in their latest monthly reports. At present, the peak travel season in the northern hemisphere is approaching in June, and the Middle East is also about to enter the summer peak of electricity consumption, which also supports the rise of oil prices. It is worth noting that as the world's largest oil importer, China has shown strong recovery momentum during the May Day period, which has led many institutions to hold an optimistic attitude towards China's crude oil demand. Jin Lianchuang crude oil analyst Han Zhengji believes that with the rebound in domestic tourism, China is absorbing a large amount of crude oil, and it is expected that China's crude oil purchase volume will remain high in the coming months. Affected by this, global crude oil inventories are showing signs of tightening. With the implementation of new production reduction measures by OPEC+starting from May, it is expected that the speed of global crude oil inventory consumption will be faster. Overall, there are peak seasons on the demand side and incremental recovery in China, while the incremental increase on the supply side is offset by the 'OPEC+' production reduction. Therefore, the oil market is likely to be in short supply in the second half of the year, and the probability of the price center moving up is high, "said An Jing. Chen Shuxian, an analyst at Dongwu Securities, pointed out that on the one hand, there is supply side tension, and on the other hand, there is demand side growth. From this, it can be inferred that the possibility of a significant drop in oil prices is relatively low, and oil prices may continue to operate at high levels in 2023. (New News Agency)
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：chinanews.com
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