Recently, under the favorable macroeconomic data of the United States and the boost from the cold weather, the international oil price broke the $90 mark. Does the international oil price really rise to 100 U.S. dollars as predicted by the international investment bank? Has the recovery of the US economy been as strong as those shown by macroeconomic data? We believe that there are still many uncertainties in the outlook for the U.S. economic recovery. In addition, the high unemployment rate, the European debt crisis, and high inflation in emerging markets will all have a huge negative impact on the global economic recovery. As a result, the short-term upward pressure on international oil prices will increase.
The United States still has many uncertainties in the economic recovery prospects. Due to Christmas and New Year's Day, December is often the peak season for consumers in Europe, America, and even the world. The US consumer sentiment index at the University of Michigan in December was 74.5, up 0.3 points from November. This seems to indicate that consumer spending has improved in the United States because consumer spending accounts for about 70% of the U.S. economy. Therefore, everyone thinks that U.S. economic recovery is relatively strong. However, U.S. citizens still need to face bleak employment prospects and strive to repay a heavy debt burden. In addition, U.S. households are still committed to reducing debt leverage, which further limits the prospects for consumption growth.
We believe that as Christmas and New Year's Day are coming to an end, consumer spending by U.S. citizens will fall sharply, and the high U.S. unemployment rate will not allow U.S. households to consume too much. However, we must emphasize that the continued rise in international oil prices has forced American citizens to increase their cost of living because gasoline has returned to more than US$3 per gallon before crude oil even reaches a new high of two years. To a certain extent, the rise in oil prices will curb consumer spending by U.S. households. Given that consumer spending has a huge impact on U.S. economic recovery prospects and U.S. unemployment remains high for a long time, we believe that it is still fashionable to determine that U.S. economic recovery is strong at present. As early as its prospects still have many uncertainties.
Next year, the global crude oil market is still oversupply. In the United States, when the United States suffers from high unemployment and Europe suffers from deep debt crisis, emerging markets are also facing increasing inflationary pressures. Last Saturday, the Chinese central bank announced another rate hike to curb inflation. We believe that as emerging markets face increasing inflationary pressure, developing countries will tighten monetary policy through monetary policies such as raising interest rates. This will, to some extent, slow down the growth rate of emerging markets and further curb their energy consumption. Demand growth, while the current global demand for crude oil growth is mainly from emerging markets. According to the International Energy Agency (IEA), the growth in oil demand from China will account for half of the growth in global oil demand in the future. Therefore, the PBOC’s rate hike will directly slow the growth rate of global crude oil demand.
At the same time, despite recent increases in energy demand in Europe and the United States due to the cold weather, crude oil inventories in Europe and the United States and other developed countries are still at historically high levels. According to the crude oil data released by the US Energy Agency (EIA), although US crude oil business inventories fell by 5.33 million barrels to 340.7 million barrels, it is still higher than the historical average over the past five years. The continued decline in U.S. crude oil inventories is mainly due to the fact that refineries are maintaining higher operating rates and reducing imports in order to avoid end of year inventory taxes, but this situation may change at the end of the year. In addition, due to the shrinking profits of refineries, the refinery will be unable to maintain a high operating rate. In addition, US crude oil imports have begun to rebound, so the US crude oil inventories may rise again in the latter period.
In the later period, as the United States weather gradually warms, the demand for heating oil in the United States will gradually decline, and the demand for heating oil in the winter is often the main force driving the demand for US crude oil. Therefore, we believe that as the United States gradually increases the volume of crude oil imports and the decline in demand for heating oil, the US crude oil inventories may be difficult to continue the downward trend.
As the growth of crude oil demand in emerging markets has slowed due to increasing inflationary pressures, crude oil inventories in developed countries such as Europe and the US are still at historically high levels, and OPEC still has 5 million to 6 million barrels/day of idle capacity to meet any additional demand growth. Therefore, we believe that it is more likely that the global crude oil market will maintain the oversupply situation next year.
Technical side: The international oil price rise is blocked By analyzing the weekly chart of NYMEX's WTI crude oil**c1 contract, we find that since late May 2009, international oil prices have been oscillating and rebounding in a rising pipeline. The recent international oil price not only broke through the $90 mark, but also touched the pipeline edge again, and along the pipeline line is the pressure line. Therefore, we believe that the international oil price is likely to be under pressure in the later period.
The United States still has many uncertainties in the economic recovery prospects. Due to Christmas and New Year's Day, December is often the peak season for consumers in Europe, America, and even the world. The US consumer sentiment index at the University of Michigan in December was 74.5, up 0.3 points from November. This seems to indicate that consumer spending has improved in the United States because consumer spending accounts for about 70% of the U.S. economy. Therefore, everyone thinks that U.S. economic recovery is relatively strong. However, U.S. citizens still need to face bleak employment prospects and strive to repay a heavy debt burden. In addition, U.S. households are still committed to reducing debt leverage, which further limits the prospects for consumption growth.
We believe that as Christmas and New Year's Day are coming to an end, consumer spending by U.S. citizens will fall sharply, and the high U.S. unemployment rate will not allow U.S. households to consume too much. However, we must emphasize that the continued rise in international oil prices has forced American citizens to increase their cost of living because gasoline has returned to more than US$3 per gallon before crude oil even reaches a new high of two years. To a certain extent, the rise in oil prices will curb consumer spending by U.S. households. Given that consumer spending has a huge impact on U.S. economic recovery prospects and U.S. unemployment remains high for a long time, we believe that it is still fashionable to determine that U.S. economic recovery is strong at present. As early as its prospects still have many uncertainties.
Next year, the global crude oil market is still oversupply. In the United States, when the United States suffers from high unemployment and Europe suffers from deep debt crisis, emerging markets are also facing increasing inflationary pressures. Last Saturday, the Chinese central bank announced another rate hike to curb inflation. We believe that as emerging markets face increasing inflationary pressure, developing countries will tighten monetary policy through monetary policies such as raising interest rates. This will, to some extent, slow down the growth rate of emerging markets and further curb their energy consumption. Demand growth, while the current global demand for crude oil growth is mainly from emerging markets. According to the International Energy Agency (IEA), the growth in oil demand from China will account for half of the growth in global oil demand in the future. Therefore, the PBOC’s rate hike will directly slow the growth rate of global crude oil demand.
At the same time, despite recent increases in energy demand in Europe and the United States due to the cold weather, crude oil inventories in Europe and the United States and other developed countries are still at historically high levels. According to the crude oil data released by the US Energy Agency (EIA), although US crude oil business inventories fell by 5.33 million barrels to 340.7 million barrels, it is still higher than the historical average over the past five years. The continued decline in U.S. crude oil inventories is mainly due to the fact that refineries are maintaining higher operating rates and reducing imports in order to avoid end of year inventory taxes, but this situation may change at the end of the year. In addition, due to the shrinking profits of refineries, the refinery will be unable to maintain a high operating rate. In addition, US crude oil imports have begun to rebound, so the US crude oil inventories may rise again in the latter period.
In the later period, as the United States weather gradually warms, the demand for heating oil in the United States will gradually decline, and the demand for heating oil in the winter is often the main force driving the demand for US crude oil. Therefore, we believe that as the United States gradually increases the volume of crude oil imports and the decline in demand for heating oil, the US crude oil inventories may be difficult to continue the downward trend.
As the growth of crude oil demand in emerging markets has slowed due to increasing inflationary pressures, crude oil inventories in developed countries such as Europe and the US are still at historically high levels, and OPEC still has 5 million to 6 million barrels/day of idle capacity to meet any additional demand growth. Therefore, we believe that it is more likely that the global crude oil market will maintain the oversupply situation next year.
Technical side: The international oil price rise is blocked By analyzing the weekly chart of NYMEX's WTI crude oil**c1 contract, we find that since late May 2009, international oil prices have been oscillating and rebounding in a rising pipeline. The recent international oil price not only broke through the $90 mark, but also touched the pipeline edge again, and along the pipeline line is the pressure line. Therefore, we believe that the international oil price is likely to be under pressure in the later period.