On Tuesday, the price of WTI crude oil fell by more than 100%, once fell by 10% to $97.43 per barrel, and finally closed down by 8.2% to $99.50 per barrel. This is the first time that the oil price has fallen below $65,438+000 since May 65,438+065,438+0.
The price of Brent crude oil was also suppressed, falling by 9.5% to 102.77 USD/barrel on Tuesday, while the price of cloth oil exceeded 120 USD/barrel less than a month ago.
Why did the price of crude oil plummet?
Due to the tight monetary policy of central banks and the fear of economic recession, panic selling in oil and other commodity markets continues to spread under the multiple pressures of tight liquidity.
The current situation of the global crude oil market is that although the supply side is not yet stable, traders have turned more attention to the demand side, fearing that the economic recession may reduce the demand for crude oil.
According to us energy information administration's data, as of June 24th, the average gasoline demand in the four weeks dropped by about 2% year-on-year.
In addition, according to the data of American Automobile Association, the average gasoline price in the United States has dropped to $4.80 per gallon. However, gasoline is still more than 50% higher than a year ago, causing drivers to cut back on expenses.
According to the Energy Research Institute, while the demand is weakening, oil companies have gradually responded to the oil price of $65,438+000 per barrel by increasing production, so it is possible to see more crude oil enter the market later this year, thus further lowering the price.
More broadly, due to the bleak economic outlook, some crude oil traders are affected by negative emotions, which in turn affects the performance of a series of commodities.
In addition, the strength of the US dollar is another factor that has dragged down oil prices in recent trading days.
Citigroup: Oil price may fall to $65 before the end of the year.
Wall Street's views on the trend of oil prices are also in a "long-short war". Citigroup became "the first big bank to be bearish on oil prices".
Citigroup analysts pointed out in the latest report that due to the economic recession, the oil price may drop to $65/barrel by the end of the year and $45/barrel by the end of 2023, which means that the oil price will drop by 40% from the current 109.7/barrel by the end of the year.
As far as oil is concerned, only in the worst global recession will global demand turn negative. The decline of demand and the persistence of supply lead to the decline of commodity prices in most recessions, and in some recessions, oil prices will fall to "marginal cost".
Generally speaking, the continuous weakening of global crude oil demand will lead to an increase in crude oil inventories and a decline in prices.
A number of commodity varieties fell sharply.
In addition to the crude oil market, with the increase of economic recession expectations, many commodity varieties have fallen sharply.
Under the pessimistic demand prospect, the global industrial metal market has been declining, and major industrial metals such as copper, aluminum, lead, zinc and nickel all recorded the biggest quarterly decline in at least a decade in the second quarter of this year.
Luntong closed down more than 4% and fell below the $8,000 mark to $7,670/ton, the recent low of 19 months. London copper price, regarded as a barometer of the world economy, fell below $8,000 in July 1, and plunged again on Tuesday, hitting the lowest level since the beginning of 20021.
In addition, major industrial metals such as lead, zinc, nickel, etc. In the second quarter of this year, it recorded the biggest quarterly decline in at least a decade. The output of aluminum, zinc, lead and tin has declined to varying degrees.
The prices of agricultural products have also been falling. Chicago wheat futures fell 18% in June, the biggest monthly decline since 20 15 years; Corn futures fell 18% in a single month, the biggest decline in ten years; Soybean reduction 13%.
In addition, the prices of coffee, sugar and cocoa have also declined.