On October 22, New York time, the December crude oil futures settlement price of the New York Mercantile Exchange (NYMEX) continued to tumble by 5.11 US dollars, closing at 67.19 US dollars/barrel, the lowest in the intraday trading range to 66.21 US dollars/barrel, setting a 16-month low . International oil prices quickly broke through the $70/barrel mark, indicating that the economic recession worries caused investors to be uneasy about the further decline in crude oil demand, which also drove the commodity market into a new wave of falling crisis.
Investors look to the real economy It should be noted that although the market widely expects that the emergency meeting of OPEC will reduce production, analysts expect the output reduction will reach 1 million barrels per day, but the price of oil still falls sharply.
After the central banks have injected capital into the financial system, the global financial crisis is expected to be resolved, but at this time, the commodity market continues to fall. This is because investors have turned their attention to the economic growth prospects.
At present, the markets of all countries have entered the third quarterly reporting cycle. The Dow fell 514 points on October 22, a decline of 5.7%. The market has eased from the sell-off sentiment of the panic of the financial crisis, and further focused on the profitability of entities. This means that the US stock market will return to its fundamentals. Similarly, in the crude oil market, investors have turned their eyes to the demand for crude oil driven by the real economy.
Although the drop in the price of gasoline at the gas station has brought about an incentive effect to demand for the second consecutive week, due to the economic slowdown, the demand for retail gasoline in the United States has decreased compared with the same period of last year. Data shows that oil and gasoline stocks have increased significantly in recent weeks as refiners in the Gulf of Mexico resumed production after Hurricane Ike. According to the US Energy Information Association (EIA), the US weekly crude oil inventories increased by 3.2 million barrels to 311.4 million barrels, an increase of 2.6 million barrels. Gasoline inventories increased by 2.7 million barrels to 196.5 million barrels a week, with an estimated increase of 2.8 million barrels. Distillate stocks increased by 2.2 million barrels a week to 124.3 million barrels, an increase of 100,000 barrels. OPEC Chairman Carlier said that the level of oil inventories is very high, and some OPEC members are unable to sell crude oil.
Even if the OPEC resolution cuts production, but because the quantity of 1 million barrels per day is still within the expected range of the market, and the implementation of the situation varies among member states, this bullish factor has been greatly digested in the early rise of the week.
The strong dollar continues to suppress oil prices The second important factor affecting international oil prices is the US dollar index. Since October, the US dollar index has exceeded a new high in nearly 18 months. The appreciation of the US dollar is like a stick in international crude oil denominated in US dollars.
Generally, there are two main factors that support the strengthening of the U.S. dollar: First, countries need large amounts of U.S. dollars to save the market. European central banks injected large amounts of liquidity funds into the banking system, raising the demand for the US dollar. At the same time, investors in various countries have also felt in this crisis that the US dollar is a relatively safe international currency compared to other currencies. With the need for hedging, a large number of US dollars have been retained by investors, further stimulating demand for the US dollar. Second, the appreciation of the dollar is relative. In such a major financial crisis, the shrinking of assets and the large amount of printed dollars flow into the market. There is no doubt that the depreciation of the real value of the US dollar will be doubtful. However, for the international monetary system, its strength is relative. Since other economies in the world still have a large space for interest rate cuts, the US dollar may cut interest rates for the last time after the meeting on interest rates. Therefore, even if the US dollar has reached its highest level against the euro in two years, the dollar's upside is likely to be further opened up, thus suppressing the direction of oil prices.
From the current point of view, oil prices are generally weak, and whether the market can stabilize and rebound will depend on whether the fiscal policies introduced by various countries have significant stimulatory effects on the real economy.
Investors look to the real economy It should be noted that although the market widely expects that the emergency meeting of OPEC will reduce production, analysts expect the output reduction will reach 1 million barrels per day, but the price of oil still falls sharply.
After the central banks have injected capital into the financial system, the global financial crisis is expected to be resolved, but at this time, the commodity market continues to fall. This is because investors have turned their attention to the economic growth prospects.
At present, the markets of all countries have entered the third quarterly reporting cycle. The Dow fell 514 points on October 22, a decline of 5.7%. The market has eased from the sell-off sentiment of the panic of the financial crisis, and further focused on the profitability of entities. This means that the US stock market will return to its fundamentals. Similarly, in the crude oil market, investors have turned their eyes to the demand for crude oil driven by the real economy.
Although the drop in the price of gasoline at the gas station has brought about an incentive effect to demand for the second consecutive week, due to the economic slowdown, the demand for retail gasoline in the United States has decreased compared with the same period of last year. Data shows that oil and gasoline stocks have increased significantly in recent weeks as refiners in the Gulf of Mexico resumed production after Hurricane Ike. According to the US Energy Information Association (EIA), the US weekly crude oil inventories increased by 3.2 million barrels to 311.4 million barrels, an increase of 2.6 million barrels. Gasoline inventories increased by 2.7 million barrels to 196.5 million barrels a week, with an estimated increase of 2.8 million barrels. Distillate stocks increased by 2.2 million barrels a week to 124.3 million barrels, an increase of 100,000 barrels. OPEC Chairman Carlier said that the level of oil inventories is very high, and some OPEC members are unable to sell crude oil.
Even if the OPEC resolution cuts production, but because the quantity of 1 million barrels per day is still within the expected range of the market, and the implementation of the situation varies among member states, this bullish factor has been greatly digested in the early rise of the week.
The strong dollar continues to suppress oil prices The second important factor affecting international oil prices is the US dollar index. Since October, the US dollar index has exceeded a new high in nearly 18 months. The appreciation of the US dollar is like a stick in international crude oil denominated in US dollars.
Generally, there are two main factors that support the strengthening of the U.S. dollar: First, countries need large amounts of U.S. dollars to save the market. European central banks injected large amounts of liquidity funds into the banking system, raising the demand for the US dollar. At the same time, investors in various countries have also felt in this crisis that the US dollar is a relatively safe international currency compared to other currencies. With the need for hedging, a large number of US dollars have been retained by investors, further stimulating demand for the US dollar. Second, the appreciation of the dollar is relative. In such a major financial crisis, the shrinking of assets and the large amount of printed dollars flow into the market. There is no doubt that the depreciation of the real value of the US dollar will be doubtful. However, for the international monetary system, its strength is relative. Since other economies in the world still have a large space for interest rate cuts, the US dollar may cut interest rates for the last time after the meeting on interest rates. Therefore, even if the US dollar has reached its highest level against the euro in two years, the dollar's upside is likely to be further opened up, thus suppressing the direction of oil prices.
From the current point of view, oil prices are generally weak, and whether the market can stabilize and rebound will depend on whether the fiscal policies introduced by various countries have significant stimulatory effects on the real economy.
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