Western countries, led by the United States, have increased their oil reserves in large quantities, intensifying the contradiction between oil supply and demand and exacerbating the rise in oil prices. (2) Insufficient supply: Another main reason for the rise in oil prices. First, unstable geopolitical factors have led to a reduction in oil supply, which has contributed to the surge in oil prices.
Second, the constant emergence of emergencies adds fuel to the fire, pushing oil prices even higher. (3) Monetary factors and inflation contribute to the rise in crude oil prices. First, the relative depreciation of the U.S. dollar contributes to the rise in crude oil prices. Second, inflation causes the U.S. dollar to rise.
Absolute depreciation leads to rising commodity prices, and rising crude oil prices lift all boats. (4) Speculative funds are the direct driving force for rising oil prices. From the above analysis, it can be seen that the contradiction between supply and demand is the essential cause of rising crude oil prices, and it is the relationship between supply and demand that
The intensification of the contradiction has put the supply and demand relationship of crude oil in a fragile balance. Under this situation, if there is any disturbance, people will worry that the supply and demand relationship will be broken, causing supply interruption, leading to a sharp rise in crude oil prices.
Past crude oil prices: The biggest black swan event in the international capital market in 2014 was undoubtedly the plunge in oil prices.
While Brent crude oil was still standing at US$115 a barrel in the middle of the year, crude oil prices suddenly collapsed in the second half of the year and fell by nearly 50% by the end of the year. Brent crude oil currently fluctuates in the range of US$55-58 per barrel.
Especially in the past three months, oil prices have plummeted by nearly 40%.
What caused such a sharp drop in oil prices in the short term? How will oil prices develop in 2015? The fundamental reason that affects oil price changes is supply and demand. In addition to supply and demand, geopolitics, weather factors and capital flows are also often cited by analysts.
variables, but only supply and demand are the determinants of the long-term trend of oil prices, while the impact of the other three variables on oil prices is either short-term or only factors that promote changes in oil prices.
From 1990 to 2013, oil prices climbed from less than $20 per barrel to a maximum of more than $140 per barrel.
During this period, the global economy achieved sustained growth of 3.6% per year.
By the end of 2013, calculated at constant prices, the global economic aggregate had more than doubled compared to 1990.
During the same period, the average annual growth rate of global oil production was only 1.25%, seriously lagging behind the growth of demand.
It can be seen that strong demand is the main driver of rising oil prices.
Of course, oil prices did not go all the way north from 1990 to 2013. During this period, there were a total of 5 major adjustments, with the amplitude of each adjustment ranging from about 33% to 76%, and the time span of the adjustment was about 2-
9 quarters.
In these five adjustments, except for the one in the third quarter of 2006, we have all seen a slowdown in demand growth, and funds have sought safe havens, pushing up the US dollar index.
The decline in oil prices in the second half of 2014 was partly due to the demand side.
Except for the United States, the recovery of the global economy in 2014 was actually slightly lower than expected. In particular, the slowdown in economic growth in Europe and China in the second half of the year led to a decline in demand for commodities.
Against this background, most commodity prices around the world fell to a certain extent in the second half of the year.
However, we should see that during the same period, the prices of commodities such as copper, iron ore, and aluminum, which also reflect fundamental demand, generally fell by only 10%-20%, while only the price of crude oil fell by as much as
50%.
Therefore, the decline in demand has a certain impact on the decline in crude oil prices, but it does not constitute the most direct factor.
The decline in crude oil prices comes more from supply-side shocks.
The impact on the supply side mainly comes from two aspects. One is the increase in U.S. shale oil production, and the other is the recovery of production in traditional oil-producing countries such as Libya and Iraq in 2014.
U.S. crude oil production in 2014 significantly exceeded previous expectations. Although the high level of U.S. oil production has been surprising in recent years, its impact on oil prices has not been greatest until recently because the scale of production growth has reached a significant level.
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With the innovation of production technology, breakthrough progress has been made in horizontal well and hydraulic fracturing technology. The cost of U.S. shale oil and gas production has been reduced, and production has continued to rise.
U.S. shale oil production has grown from less than 500,000 barrels per day in 2008 to the current production scale of 4 million barrels per day, and it is expected that its proportion in future U.S. crude oil production will gradually increase.
This has directly led to the increase in U.S. crude oil production from 5 million barrels per day in early 2008 to the current 9 million barrels per day.
In addition to the increase in supply from the United States, at the same time, as the geopolitical crisis in oil-producing countries such as Iraq and Libya has eased, OPEC crude oil has returned to normal supply.
In the third quarter of 2014, OPEC crude oil production was 30.3 million barrels per day, which was already higher than the daily oil production limit.