In this special period, the dawn of the oil crisis is definitely good news.

Text/Autobots Scroll

On April 2, Brent crude oil price jumped, rising from a low of $25.58 to $28, with a one-day increase of more than 10%. The rise in crude oil prices has driven investors' enthusiasm, and the Asian and European stock markets have generally risen at the same time. A-share Shanghai Composite Index and Growth Enterprise Market rose by 1.69% and 2.80% respectively. Among them, oil, construction machinery, aviation, tourism and other sectors were among the top gainers.

The almost crazy monetary and fiscal stimulus plans in Europe and America temporarily stopped the bleeding in the global capital market, and also came out of a strong rebound. However, due to the rapid growth of the confirmed cases in COVID-19, USA, and the uncontrolled trend, the global stock market resumed its downward trend due to concerns about the long-term economy.

In order to prevent the real economy from suffering a second blow because the financial system is out of control, asset prices may need new support points besides money. The stabilization and rebound of crude oil prices on April 2 played a key and powerful supporting role in the stabilization of global asset prices.

Unlimited monetary policy may effectively alleviate the liquidity crisis, but the oil crisis is still an uncertain factor that cannot be ignored. The pattern of crude oil is very similar to the Three Kingdoms (Wei, Shu and Wu) in the late Eastern Han Dynasty. As long as two of them unite, Saudi Arabia, Russia and the United States can take the lead.

COVID-19 epidemic ravaged the world, global trade plummeted, and oil demand fell sharply. In response to the situation, Saudi Arabia and Russia unexpectedly broke down on the issue of production reduction. Not only did the negotiations break down, but the two companies got back together. Instead of reducing production, they increase production and show each other their muscles. This directly led to a stormy drop in international crude oil prices. June 5438 +2020 10, Brent crude oil is still $64 a barrel. In the past few days, the lowest price has reached 25 dollars a barrel. The speed of decline is rare in history.

Russia and Saudi Arabia are embarrassed, and the United States can't stand it first. This is the war between the boss and the second, and the third is accidentally destroyed. Some people may say that the United States is now the country with the highest oil production in the world. Why the third place?

There are two main factors that affect the international crude oil balance: one is the exploitation cost, and the other is the net export volume. From these two points of view, Saudi Arabia is still firmly in the first place, Russia is second, and the United States can only rank third. After all, where is the exploitation cost of shale oil, and the crude oil consumption of the United States is not comparable to that of ordinary countries.

The plunge in crude oil prices will have a strong impact on global futures assets, especially ferrous metals, and its negative effects will also be transmitted to the securities market. The reality is that due to the high cost of shale oil exploitation in the United States, many banks in the United States have given shale oil enterprises a large number of financing loans. Once the shale oil in the United States falls, it will inevitably impact the financial market. The current situation is that several shale oil giants in the United States have been pushed to the brink of bankruptcy.

On April 1 day, US President Trump and Russian President Putin telephoned, and both sides agreed that the current oil price is not in the national interests of the United States and Russia. At the same time, the United States is also putting pressure on Saudi Arabia, including taxing oil imported from Saudi Arabia to the United States, and Saudi Arabia's tone has begun to loosen.

From a national perspective, low oil prices are beneficial to China for the simple reason that we are the largest oil importer in the world. Zhou, executive vice chairman of China Energy Research Association, said that China imports about 460 million tons of oil every year, while domestic crude oil is less than 200 million tons. Therefore, low oil prices are beneficial to China as a whole. As for the special pricing mechanism of China's refined oil products, when the international oil price is less than $40 a barrel, the domestic and international prices are decoupled, but the profits generated by this price difference will be turned over from the oil companies to the state treasury.

Now it is basically certain that the bottom of the oil price has been proved. Unless "Wei Shuwu" talks about collapse again, it is unlikely to hit a new low. Now that the United States and Russia have generally agreed, there is no reason for Saudi Arabia to go to war with the United States completely. Although the oil price has bottomed out, the fundamental logic of the sharp rise is still not there. Low oil prices have tangible benefits to China's infrastructure, industry including automobile industry, and even price stability, and are also of great significance to stabilizing the capital market, especially the futures market.

In this special period, the dawn of the oil crisis is definitely good news. (Text/"Autobots" scrolling, part of the picture source network) Copyright statement This article is an exclusive original manuscript of Autobots, and the copyright belongs to Autobots.

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