Falling oil prices have benefited the Chinese economy, which has been struggling to recover from the epidemic.

The sudden drop in oil prices has brought immeasurable losses to the international market. At 10:00 am on March 9th, Beijing time, the benchmark oil prices in New York and London both fell by more than 20%, and Brent crude oil fell by more than 20%. Prices fell by more than 30%. Contrary to this decline, COSCO Shipping Co., Ltd. rose sharply on March 9, with A shares hitting the daily limit and H shares exceeding 13%. In fact, for the domestic economy, the decline in oil prices not only makes it possible to reduce the rising CPI, but more importantly, it significantly benefits companies in terms of cost reduction. Bank of America Merrill Lynch estimates that for every 10% drop in oil prices, China's GDP growth rate will increase by about 0.15 percentage points. Therefore, the decline in international oil prices is conducive to China's economic recovery.

The deputy general manager of the Macro Strategy Department of Guangfa Fund said that China is a net importer of crude oil, so falling oil prices will help reduce our import costs and inflation expectations. The outbreak is expected to increase the price of some necessities, and the agency predicts that CPI will remain high at around 5% in February. However, falling crude oil prices are expected to have a dampening effect on CPI in March. Liu Yuanchun, vice president of Renmin University of China, said in an interview with a reporter from China Times that there is no basis for continued inflation in the Chinese economy. Affected by the epidemic, stagflation may occur in the short term and face the dual pressures of unemployment and rising prices, all of which require macroeconomic policies to take them seriously. In just a few seconds after the opening of the Asian trading session on March 9, Brent crude oil futures fell by the second-largest level after the Gulf War.

The collapse of the OPEC+ alliance triggered an all-out price war between Saudi Arabia and Russia. Over the weekend, Saudi Arabia cut its official oil price by at least 20 years and hinted to buyers that it would certainly increase production as an option. Crude oil will be supplied to the market in large quantities, and oil prices may fall to around $20. At the same time, Saudi Aramco also made its largest price cut in 30 years. Aramco offers unprecedented discounts to customers in Asia, Europe and the United States. Cutting April crude oil sales to Asia by $4-6/barrel, lowering U.S. crude oil sales prices in April to $7/barrel, the Nordic refiner's flagship Arabian Light crude oil price fell by $8/barrel, while prices As low as $10.25/barrel.