Related introduction:
A week ago, the Saudi Energy Minister said that the Organization of Petroleum Exporting Countries was very willing to extend the production reduction agreement for another six months. But only six weeks ago, the Saudi Energy Minister also said that the Organization of Petroleum Exporting Countries would not consider extending the production reduction agreement. This scene seems familiar. Last year, Saudi Arabia and Russia often said some contradictory words, which caused the market to be very confused about whether an agreement could be reached. They play with their mouths, and the price of crude oil jumps up and down;
Some analysts believe that Saudi Arabia and Russia are still bent on suppressing American shale oil, so their sincerity in extending the production reduction agreement this time is doubtful. Do Saudi Arabia and Russia really want oil prices to rise to a profitable level in American shale oil? This also requires a big question mark.
At the same time, American shale oil producers keep preaching that their "break-even" prices are getting lower and lower.
These remarks advocating the extension of the production reduction agreement have led to strong speculation in the crude oil futures market. Although oil prices have been sideways for a long time, open contracts have soared. Obviously, many speculators believe that oil prices will skyrocket in the future.
But it is estimated that they will have to wait for a long time, at least until Saudi Arabia and Russia see the massive closure of US shale oil capital inflows. The downturn in global oil exploration investment will lead to a sharp decline in crude oil supply, but the global economy is weak and demand growth is weak, so I am afraid it will soon enter a downturn. But whether they can hold on until then is still a question.