In the second half of the year, international oil prices may fluctuate at a high level

Against the backdrop of rising global inflationary pressures, commodity prices have been at a high level
since June 2022.
Recently, crude oil futures prices and spot prices in the international market have continued to fall
sharply.
As of July 8, WTI and Brent crude oil futures have fallen by about 17%
since the beginning of June.

Experts interviewed by the China Economic Times said that the shortage of oil supply in Europe caused by the Russian-Ukrainian conflict is difficult to alleviate, and the global oil supply and demand fundamentals will show a tight balance in the second half of this year, and international oil prices will remain at a high level overall
.
It is necessary to persistently do a good job in ensuring supply and price stability, and comprehensively use various policy tools to effectively guide market expectations
.

The pattern of world oil trade has undergone profound changes

"With the escalation of the conflict between Russia and Ukraine, the decoupling of energy between Europe and Russia has caused profound changes
in the pattern of world oil trade.
Before the Russia-Ukraine conflict, Europe mainly imported oil from Russia, and crude oil imports from Russia accounted for 32% of its total imports in 2021, while also purchasing
from the Middle East, West Africa and the Americas.
After the outbreak of the Russian-Ukrainian conflict, on the one hand, Europe took the initiative to reduce crude oil imports from Russia, and the sixth round of EU sanctions plans to reduce Russian crude oil imports by 90% by the end of 2022, and instead import crude oil
to West Africa, the Americas and the Middle East.
On the other hand, Russia's oil trade flow also shows the characteristics of 'turning from west to east', affected by European and American sanctions, Russia's oil exports to non-European countries soared by 20% in the first half of this year, especially in India and Egypt
.
Guo Jiaofeng, deputy director and researcher of the Institute of Resources and Environmental Policy of the Development Research Center of the State Council, said
in an interview with this reporter.

Wei Qijia, director and researcher of the Industry Office of the Forecast Department of the State Information Center, told this reporter that from a longer period of time, the decline in crude oil prices was an unexpected "decline" after the price "sang all the way" in the early stage, highlighting the current global economic difficulties
.
"The current trend of crude oil price changes has been completely detached from the fundamentals of crude oil supply and demand, and any accidental factor and event can cause large fluctuations
in oil prices.
" There is still the possibility of speculation in the
international energy market in the short term.
”

Market fears of a global recession have intensified

What are the factors influencing recent changes in crude oil prices? Guo Jiaofeng believes that the adjustment of the international oil trade pattern triggered by the Russian-Ukrainian conflict has aggravated the tension of global oil exports, coupled with the overall tightening of supply and demand fundamentals, resulting in a rapid rise in international oil prices in the first half of this year.

After the crisis, international oil prices jumped from the level of $90/barrel in late February to the level of $140/barrel, and then experienced two rounds of relatively large fluctuations at the end of March and early June, and at the end of June, it fluctuated around the level of $110/barrel, and the half-year fluctuation of international oil prices was as high as $50/barrel
.

"Mainly the anticipation factor
.
Crude oil prices, which are closely linked to the economic situation, have continued to decline recently, as a result of aggressive interest rate hikes by European and American central banks and a number of lower-than-expected US economic data
, as well as the recent release of a number of lower-than-expected US economic data.
At the same time, complex geopolitical conflicts invisibly amplify the 'financial attributes' contained in crude oil itself, bringing volatility and uncertainty
to price changes.
Wei Qijia said
.

Xie Yuqi, a researcher at the China Electronics Information Industry Development Research Institute, told this reporter that first, most of the world's major economies have implemented tightening monetary policy to control their own serious inflation levels, in particular, the Fed's multiple rounds of interest rate hikes have promoted the US dollar index to continue to strengthen, causing crude oil price fluctuations
to a certain extent.
So far in 2022, the dollar index has risen from around 96 volatility to around 107
.
As the main settlement currency of global commodities, the US dollar entering an appreciation channel has a negative impact
on crude oil prices.
Second, the United States has implemented the largest strategic oil reserve release in history, with a total of 180 million barrels (an average of 1 million barrels per day), and the international energy structure IEA also announced the release of 120 million barrels of additional reserves, which has rapidly increased global crude oil supply in a short period of time and has a depressive effect
on crude oil prices.
Third, geopolitical and economic conflicts have become more complex, and changes in the international situation such as wars, regional economic agreements, nuclear issues, and climate policy adjustments have brought more uncertainty to the international crude oil market and disrupted crude oil market prices
.
Fourth, the market's negative expectations for global economic growth may cause short-term fluctuations
in crude oil prices.
Fifth, the global new crown pneumonia epidemic has shown a repeated trend, the United States has repeated infections of some groups, and the epidemic in China has weakened market demand
.

In the second half of the year, oil prices are likely to fluctuate in a high and wide range

Guo Jiaofeng believes that the conflict between Russia and Ukraine has caused the shortage of oil supply in Europe to be difficult to alleviate, and the global oil supply and demand fundamentals will show a tight balance in the second half of this year, and international oil prices will remain high overall
.

"In the second half of the year, the fundamentals of the tight balance of oil supply and demand have not changed, and oil prices will still fluctuate
in a high and wide range with a high probability.
" The forecast results of some major financial institutions in the world on international oil prices in 2022 show that the divergence between institutions on the trend of oil prices has gradually decreased, and on the whole, oil prices will still hover
at a high level in the second half of the year.
Considering that there are still large variables in the Russia-Ukraine conflict, oil prices are extremely sensitive to the impact of frequent geopolitical conflicts, abnormal La Niña weather, and reversals in the appreciation of the US dollar in the short term, and it is expected that the oil price center in the second half of 2022 will be above
the level of $100/barrel.
Guo Jiaofeng said
.

Xie Yuqi suggested that the first is to anchor the long-term supply shortage trend in the crude oil market and increase strategic imports and reserves
.
The second is to maintain friendly relations with major crude oil producing countries and international organizations to ensure their own crude oil supply
.
The third is to promote the process of crude oil payment settled in RMB, and reduce the spillover effect
of other countries' monetary policies on international crude oil prices.

Wei Qijia suggested that we should continue to do a good job in ensuring supply and price stability, and comprehensively use various policy tools to effectively guide market expectations
.
From the perspective of the decline in crude oil prices themselves, the global commodity pricing settlement currency is the US dollar, the strengthening of the US dollar leads to the decline of commodity prices, and then the domestic crude oil, commodity prices into a downward trend, the current for pulling down China's overall price level, promoting economic development is good, while making the structural decline
of large infrastructure and general manufacturing costs.
This will have a better impact on the middle and downstream streams, especially processing and manufacturing enterprises, and promote their cost reduction
.

"China has maintained the overall stability of prices in the impact of external risks, especially the growth rate of industrial producers' ex-factory prices is in a relatively reasonable range and operating state, which is precisely thanks to China's solid work of ensuring supply and stabilizing prices
.
" In the future, we should continue to sum up these experiences and practices to provide a stronger guarantee
for stabilizing the overall economic market.
Wei Qijia said
.