Global crude oil supply and demand drop, it is difficult to fundamentally boost oil pricesGlobal crude oilsupply and demand drop, it is difficult to fundamentally boost oil prices
Recently,international oil prices have fluctuated sharply. New York crude oil futuresprices have fallen from a high of 61.66 US dollars per barrel on September 16to the current US $ 53 per barrel. For oil prices, the two most importantinfluencing factors are supply and demand and the trend of the US dollar. Thelatter is currently declining. At the same time, crude oil has seen a declinein both supply and demand at the same time. Due to the impact of event factors,the output of the Organization of the Petroleum Exporting Countries (OPEC) hasfallen sharply. . OPECpointed out in the latest issue of a monthly report that the organization ’scrude oil output in September was 28.491 million barrels per day, a significantdecrease of 1.318 million barrels per day from August. If only thesupply side drops sharply, but demand increases or at least remains at theoriginal level, then the price of oil will likely continue to rise. However,there are many indications that the current demand for crude oil is not"powerful." The confusing supply and demand level makes it difficultto predict the outlook for oil prices. OPEC willhold a plenary meeting on December 5. At that time, OPEC oil ministers willmake adjustments to the next steps based on the oil market supply and demand inthe second half of the year. Market participants point out that the influenceof geopolitical factors on oil prices is short-term, and future market changeswill still depend on the pace of global economic recovery and the trend ofsupply and demand. Whether OPEC will expand its output cuts and what willhappen to the US shale oil production will make the outlook for theinternational oil market uncertain. The analyst ofRoyal Bank of Canada believes that although the oil supply is currentlydeclining, if the major oil-producing countries expand their output in thefuture, it may still further suppress the supply, but if demand is still weak,it will be difficult to fundamentally boost oil prices. Therefore, the degreeof global economic recovery in the future will become a key factor affectingoil prices.
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