International oil prices fell below the $80 mark! What happened?

International oil prices have recently shown a sharp downward trend, and the price of crude oil in the two major indicators has both fallen to the lowest value
since the beginning of the year.

As of the close of trading on September 23, WTI crude oil futures fell $4.
75, or 5.
69%, to close at $78.
74 per barrel; Brent crude futures fell $4.
31, or 4.
76%, to settle at $86.
15 a barrel
.

International oil prices have basically given up their growth since the beginning of the year, and WTI crude oil prices have even fallen below the $80 / barrel mark
.

01.
The interest rate hike storm is coming

Analysts believe that this round of oil price declines is mainly affected by the wave of interest rate hikes by global central banks and the pressure of the strong US dollar
.

On September 21, local time, the Federal Reserve announced that it would raise its benchmark interest rate by 75 basis points again to a range
of 3.
00%-3.
25%.
This is the fifth rate hike by the Fed this year and the third consecutive 75 basis point
hike.

In response to high inflationary pressures, the United Kingdom, Norway, Sweden, Switzerland and other countries also announced sharp interest rate
hikes this week.
European Central Bank President Lagarde said on the 20th that the European Central Bank will continue to raise interest rates to curb the impact of
high inflation on the economy.

With the release of strong signals from many countries in Europe and the United States, a storm
of interest rate hikes has been set off around the world.
This has led to growing concerns about the global economy
.
Media reports suggest that the United States has shown a series of signs
of slowing economic growth.

Aggressive rate hikes will dampen economic activity and weaken the outlook for crude oil demand, further increasing the risk of a global recession
.

At the same time, the Fed's aggressive interest rate hikes have also contributed to a sharp appreciation of the dollar, which has now soared to a nearly 20-year high
.
For non-dollar holders, a stronger dollar will make it more expensive to buy oil, dampening demand for commodities and weighing on oil prices
.

Under the influence of multiple factors, international crude oil prices have recently declined
significantly.

02.
OPEC+ will reduce production slightly

However, unlike European and American countries that want to reduce oil prices and curb inflation, OPEC+ oil producers prefer to maintain high oil prices
.

In the face of the downward trend, OPEC+ began to respond.

At its meeting in early September, OPEC+ said it would cut production by 100,000 b/d from October, bringing supply back to August levels
.

Although the 100,000 b/d cut was modest and yielded little change on the production side after being apportioned to member countries, it reversed previous plans to increase production and was the organization's first cut in more than a year
.
OPEC+'s move presents a multi-party game in the price market
.

The future trend of oil prices will continue to be affected by many factors
.

A study released by the World Bank on the 15th said that global central banks synchronously raise interest rates to deal with inflation, which may plunge the world economy into recession and bring financial crises to emerging market and developing economies, causing lasting damage
.

But Fed Chairman Jerome Powell said that in order to bring the current high inflation to the Fed's target level, the U.
S.
economy will go through a period of below-trend growth and the labor market will also soften, but this is the pain
to bear.
Analysts believe that the Fed's series of actions show that it is willing to risk a recession to reduce inflation
.

A few days ago, Goldman Sachs lowered its forecast
for U.
S.
economic growth next year.
Jane Harchus and other Goldman Sachs economists said in a report on the 16th that the US gross domestic product will grow by 1.
1% in 2023, compared with the previous forecast of 1.
5%.

Their expectations for U.
S.
economic growth in 2022 remain unchanged at 0
.