A brief history of international oil prices
Let's take Brent crude oil as an example to review the history of international crude oil prices (Brent crude oil is produced in Brent area of North Atlantic with low sulfur content, light weight and good quality). Before 1970s, the world oil was mainly controlled by Seven Sisters, a western oil company, and the price of crude oil remained below $2/barrel for a long time. In the early 1970s, the first oil crisis rose to 12 USD/barrel, and in the late 1970s, the second oil crisis quickly rose to 40 USD/barrel.
In the mid-1980s, Saudi Arabia sold oil at a low price, the output of non-OPEC oil producers increased, the market demand was sluggish, and the overall oil price fell, reaching 10 USD/barrel by the end of 1998.
1998 after the financial crisis, with the rapid development of emerging market countries led by Brazil, Russian, Indian and China BRIC countries, the demand for crude oil increased greatly. In 2008, the price of crude oil rose from a dozen dollars a barrel to nearly 150 dollars a barrel. As the saying goes, "climb high and fall miserably", followed by the financial crisis, oil prices quickly pulled into the abyss from the peak, and fell to nearly 40 dollars in less than five months, just like a roller coaster.
Subsequently, through the Organization of Petroleum Exporting Countries (OPEC) several times to reduce production and protect prices, governments of various countries actively rescued the market, the economy gradually stabilized, demand rebounded, and oil prices rebounded. As we all know, during this period, American shale oil (crude oil is formed by fracturing oil-generating mudstone and shale) broke out halfway. After decades of development, American shale oil is finally fat and strong. In 20 1 1 year, American shale oil production exceeded 50 million tons for the first time, reached 1 million tons in 20 12 years, reached 200 million tons in 20 14 years, and exceeded 300 million tons in 20 18 years (accounting for US crude oil consumption in that year) With the massive increase of crude oil supply and the refusal of the Organization of Petroleum Exporting Countries to cut production (aiming at killing American shale oil with no cost advantage through low oil prices), Brent crude oil dropped from about 1 15 to about 12.30 at the end of 20 15. 20 18 Due to the reduction of production by the Organization of Petroleum Exporting Countries and Russia, the oil price once rose above $80/barrel.
No one expected that COVID-19, which suddenly raged in 2020, would have such a huge impact on the demand for crude oil. Production has stopped, traffic has been blocked, billions of people have been isolated from their homes, planes in the sky are sparse, roads on the ground are clear ... and the price of crude oil has fallen to freezing point ... and now it is rising slowly and difficultly.
Second, the influencing factors and future geometry of oil prices?
Judging from the history of international crude oil prices, it is essentially controlled by the relationship between supply and demand. There are many factors that affect the relationship between supply and demand, mainly including measures to increase or decrease production in major oil-producing countries, economic development in major consumer countries and progress in related technologies (technological progress in exploration and development, improvement of fuel efficiency, development of new energy sources, etc.). Other unexpected events, such as war, oil workers' strike, abnormal weather and the recent pneumonia epidemic, will also cause sharp fluctuations in oil prices.
What will happen to international oil prices in the future?
In my humble opinion, under the influence of COVID-19, production and economic activities have shrunk in a short period of time, and people's travel activities have been greatly reduced, resulting in a rapid decline in crude oil demand; On the other hand, the output of crude oil cannot be reduced rapidly (the output of crude oil can be switched by tap water), and the situation of oversupply of crude oil in the market continues to intensify. Subsequently, with the recovery of production in various countries, especially the gradual victory of China's anti-epidemic, production economic activities are rapidly recovering, the delayed production will be resumed by increasing horsepower, and the demand for crude oil will gradually pick up. I believe that after the epidemic has passed, the oil price will quickly return to the level before the epidemic, and even rush to a high level.
In the medium and long term, the oil price should return to the reasonable range of 50-60 and 60-70 USD/barrel, which is in the interest of many parties. Even if the Organization of Petroleum Exporting Countries forces American shale oil that has no cost advantage to withdraw through price war (some companies have gone bankrupt at present), it is only temporary, because no one can bear the long-term cost price or sell crude oil at a loss. Even Saudi Arabia, Kuwait, Qatar and other Middle Eastern countries with extremely low oil production costs (the cost of producing a barrel of crude oil is several dollars to more than ten dollars) are difficult to sustain. After all, the finance and economy of these countries are highly dependent on crude oil exports, and it is absolutely impossible for those who have been spending money like water to eat the soil because of low oil prices and reduced income. We will definitely cut production appropriately, return oil prices to a relatively high position, and maintain a good financial situation. Once the oil price returns to a higher level, shale oil will soon resume its prosperity and become more and more tenacious (with the continuous progress of technology, the production cost will gradually decrease), just like Xiao Qiang, which can't be killed.
On the other hand, despite the tightening of environmental protection policies, countries are vigorously developing various new energy sources, but it will squeeze the space for consumption of high-carbon energy such as coal and oil. At present and for a long time to come, although the proportion of coal and oil in energy consumption will gradually decrease, the absolute consumption will still increase slowly. After all, the economies of China, Indian and other populous countries are still developing rapidly, and the demand for energy consumption is still great. In 20 18, the growth of oil consumption in China and India accounted for two-thirds of the global growth. The GDP growth of other Southeast Asian and African countries has also been quite eye-catching in recent years (if there is no water). With the development of economy, people's demand for energy will increase, and the per capita oil consumption of many developing countries still lags far behind that of developed countries.
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Low crude oil prices are not all good. Low oil prices will not only have a heavy impact on the oil and gas exploration and development industry, but also bring a serious blow to the clean energy industry with good development momentum and inhibit its development. And clean energy is one of the important means to reduce or even get rid of the high external dependence of crude oil in the future. At present, China's dependence on foreign crude oil has reached 70%, so it is imperative to ensure the safety of energy supply.
The factors affecting international oil prices will become more and more complicated.
Third, the impact on the upstream oil people.
Ok, let's take a look at the influence of the change of international oil price on the upstream (exploration and development) oil people.
Once, with that love, I reported to the "Whampoa Military Academy" in this industry. In my impression, those towering derricks, huge platforms, net-like pipelines and the roar of machines, plus the words "only a desolate desert, no desolate life" and "I would rather live less than 20 years than try my best to win a big oil field", are very exciting. Indeed, you will feel that this line is a big thing and feel "glorious" for a moment.
More than a decade ago, global oil prices rose, exploration and development were in full swing, and graduates of petroleum backbone majors (geology, geophysical exploration, petroleum engineering, storage and transportation, etc.). ) Very popular. There is no worry about finding a job, but where to go. Everyone looking for a job is to gather together a resume, go to a department store to find a cheap suit that looks like a person, and wait for the arrival of the three major oil recruitment corps. The supply-demand ratio of backbone graduates is often 1, or even 1 to 10. In the relationship between supply and demand, students majoring in backbone can sign contracts with male and female friends who are not majoring in petroleum. Excellent even heard that you can bring three (not limited to male and female friends); I also heard that some students who failed several courses in playing games rushed into the gym at the end of the job fair and threw their student ID cards to the recruiter to sign the contract. At that time, the students majoring in petroleum backbone were proud of the spring breeze when they walked on the road, and it was no exaggeration to describe them as following the wind. How many students majoring in general engineering dream of switching to petroleum? ...
Thirty years in Hedong, thirty years in Hexi. In recent years, with the bleak price of crude oil and the saturation of personnel, the three major oil companies no longer recruit in groups. Like many other companies, they use online investment, evaluation and merit-based interviews, and their demand is greatly reduced. Students must work hard and show their talents to the maximum extent, so as to be favored and get a position. Some oil backbone students either switch to general majors and various studies, or look for internship opportunities in the internet and financial industries to prepare for their career change in advance. Those glamorous foreign oil companies have withdrawn from China. On the contrary, internet giants have become ideal employers for students, flocking to them.
Oil people in the upper reaches of the workplace are also having a hard time. Oil and gas companies have reorganized assets, cut expenses and optimized personnel, and some personnel have been forced to leave the upstream industry. Although state-owned enterprises do not lay off employees, the number of projects has decreased significantly, and many people are idle. Schlumberger, Halliburton and other foreign-funded oil service companies have greatly reduced their projects, their revenues and profits have fallen sharply, and they have continuously laid off employees.
Compared with traditional industries, internet plus, artificial intelligence, big data, cloud computing, etc. They all rise rapidly and the iteration speed is getting faster and faster. These emerging technologies are also gradually integrated into traditional industries, prompting traditional industries to continuously improve their efficiency and usher in opportunities for further development. Oil and gas exploration and development is no exception. The integration technology of exploration and development, visualization technology (VR), precise fracturing and intelligent submarine factory have changed the traditional understanding and means of exploration and development, and the construction of "digital oilfield" and "smart oilfield" is in the ascendant. The change of understanding is crucial. This industry sometimes pays too much attention to experience, relies on inertial selection, experiences the "baptism" of low oil prices, and will certainly accept new ideas, technologies and methods more enthusiastically. Just as students' job hunting has changed from "waiting, relying and wanting" in the past to "rushing, doing and fighting" now, this is a positive change.
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This is an era of rapid change and fierce competition. It can also be said that this is the best time and the worst time. It is not only oil and gas exploration and development, no matter which industry, only by welcoming it, adapting to it and making preparations in advance, can the phoenix be nirvana. After all, the express train of time stops for a short time, and no one wants to stay on the platform after it rumbles away.