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English
In the context of economic recovery and increased demand for crude oil imports, coinciding with the decline in international crude oil prices can greatly reduce the cost of China's economic recovery.
International crude oil prices plummeted across the board again on October 14th (US time). In the late trading session of the US NYMEX, crude oil prices further widened, falling $3.90 to close at $81.84 per barrel, a staggering 1.55% drop. On the same day, Brent crude oil prices also fell to their lowest level in nearly four years.
Although oil prices remained flat the next day, international oil prices had been falling since June, with a cumulative drop of over 26%. In the past few decades, whenever international oil prices fell, the Organization of the Petroleum Exporting Countries (OPEC), as the coordinating international production and operation organization, always stepped forward to coordinate, mostly by reducing OPEC oil production and reasonably allocating OPEC member countries' share of oil production and export to control the supply of the international crude oil market, achieve the balance of international crude oil prices, and appreciate to maximize the interests of OPEC members. However, the sharp drop in international crude oil prices this time is probably a thing of the past. Almost everyone has seen that holding the OPEC Vienna meeting next month on the 27th will not yield any results. At present, there have been rumors in the market that there are significant internal divisions within OPEC.
The reason for the current drop in international oil prices is not like in previous times, where supply or demand were the sole factors. This time, there are issues with both sides.
From a demand perspective, although the US economy has begun to recover, the speed and magnitude of the recovery are not significant. The European economy has been slow to recover and, like the Chinese economy, faces serious downward pressure. The Japanese economy is also struggling to rise. The weak demand from the largest buyers in the four international crude oil markets of China, the United States, Europe, and Japan determines the downward trend of international crude oil market prices. According to the International Energy Agency report, the year-on-year increase in global daily crude oil demand this year is only 650000 barrels, lower than the previously estimated 800000 barrels. And the US crude oil reserves may have increased by about 2.5 million barrels last week.
On the supply side, according to OPEC data, oil production increased by 402000 barrels in September to 30.47 million barrels per day, the highest level since last summer.
This oversupply is considered a normal phenomenon in the international crude oil market. The revolutionary factor that truly caused the continuous decline of international crude oil prices is the success of shale gas development in the United States. Under this impact, whether it is OPEC member countries such as Saudi Arabia, Kuwait, Iraq, or non OPEC Russia, no one is willing to reduce their own oil production and supply.
In this way, $81.84 per barrel will not be the cut-off line for this wave of international oil price decline. Moreover, the downward trend in international crude oil market prices is unlikely to change for at least the next two to three years.
According to experts' estimates, when international oil prices fall below $80 per barrel, apart from a few countries on the Arabian Peninsula, few crude oil supply countries can afford it. However, the current continuous decline in international oil prices presents an opportunity for the stable growth of the Chinese economy.
Under a series of mild stimuli, the Chinese economy is expected to rebound in the fourth quarter. China has long been the largest exporter of crude oil, and with the economic recovery and increasing demand for crude oil imports, coinciding with the decline in international crude oil prices, it can greatly reduce the cost of China's economic recovery.
However, in the current situation, firstly, we do not need to buy or stockpile crude oil on a large scale, as the current international oil prices have not fallen enough. 2、 In business, we are carrying out market-oriented reforms domestically, and the international market should pay more attention to market principles. Nowadays, the international crude oil market is a buyer's market, and China has a lot of room for choice.
Most importantly, overseas mergers and acquisitions have gradually become a new growth point for China's economic development. China has been pursuing overseas mergers and acquisitions of international oil companies, and in the near future, the international oil M&A market may also become a buyer's market. In addition, the focus of overseas mergers and acquisitions should be more on emerging shale enterprises with broad future market prospects. On the one hand, the development of shale gas technology in China has not yet passed the standard, and on the other hand, the discovered shale gas deposits in China do not have commercial development significance. Under the impact of the continuous decline in international oil prices, there will definitely be a market for overseas shale gas companies to purchase in the future. We must seize this once-in-a-lifetime opportunity.
