International oil prices hit a seven-year high, and the future trend will continue to fluctuate

Affected by factors such as geopolitical tensions threatening crude oil supply, international oil prices rose to a seven-year high on January 18
.

International oil prices hit a seven-year high

As the attack on the United Arab Emirates sparked market concerns about escalating geopolitical risks in the Middle East, international crude oil futures prices rose significantly at the close on the 18th and hit the highest closing price since 2014
.

A fuel tanker explosion and a fire at an airport construction site occurred in Abu Dhabi, the capital of the United Arab Emirates, on the 17th
.

Emirates NOC said its operations were unaffected by the fire incident and launched a business continuity plan to ensure reliable and uninterrupted product supply to local and international customers
.

The Houthi drone attack on the UAE has reignited concerns about potential disruptions to crude supplies in the region, said Edward Moya, a senior market analyst at online foreign exchange trading platform Oanda
.

Unless GCC countries find a way to defuse regional tensions or prevent regional state or non-state actors from taking action, Torbjörn Saltwitt, principal analyst for the Middle East and North Africa at global risk and strategy consultancy Verisk Maplecroft, said: hostile, the Gulf states will continue to be vulnerable
.

　　Rystad Energy analyst Louise Dixon said that while the damage to the UAE's oil facilities was modest, it raised questions about whether there will be more supply disruptions in the region in 2022
.

　　Many institutions are optimistic about the trend of oil prices

　　For the whole year of 2021, international oil prices have risen by about 50%
.

　　High demand and sluggish supply remain the main reasons for the recent rise in oil prices
.

　　Herima Croft, head of commodity strategy at Royal Bank of Canada, believes that the current rise in international oil prices is very dangerous.
Even if oil supply is not subject to new disruptions, oil prices are likely to rise above $100 a barrel
.
The last time international oil prices topped $100 a barrel was in the summer of 2014
.

　　Fading concerns about the Omicron strain and a downward revision to the global supply outlook for 2022 have narrowed forecasts for this year's oil glut, said Tyler Ritchie, co-editor of the 7 Point Market Report, a U.
S.
market research publication
.
That means below-average oil inventories won't recover anytime soon in the coming quarters
.

　　Gas shortages in Europe and Asia have also boosted demand for oil, which rose by 500,000 bpd in December 2021, with a further increase of 300,000 bpd expected in January and February this year, analysts at Goldman Sachs said.
Today, oil demand this year and next will reach an all-time high
.
Goldman Sachs head of energy research Damian Kuvalin said that it is entirely possible for international oil prices to rise to $100 or even $110 a barrel
.
Kuvalin sees two possible paths for oil prices to rise above $100 a barrel
.
First, the relationship between oil supply and demand continues to be tense
.
Second, the high inflation in the world will continue, which will eventually be transmitted to oil production, which will increase the cost of oil
.

　　Rising energy prices, including oil, are also continuing to push up global inflation
.
According to data released by the U.
S.
Bureau of Labor Statistics, the U.
S.
inflation rate in December 2021 has reached 7.
0%, of which energy prices rose by 29.
3% year-on-year, the largest increase among all major goods and services
.

　　The future volatility trend remains

　　Analysts pointed out that although the market currently maintains a cautiously optimistic judgment on short-term oil prices, considering the changes in the global spread of the Omicron virus strain, the impact on crude oil demand, and changes in the production plans of oil-producing countries such as OPEC, it is expected that Oil price volatility remains high in the short term
.

　　Reuters pointed out that for some time to come, tensions in the Persian Gulf may add another "fuel" to the rise in oil prices, because the region accounts for about 40% of the world's total seaborne oil
.
In addition, tensions between Ukraine and OPEC and non-OPEC oil-producing countries and Russia have also increased geopolitical risks, and any small fluctuations will affect the sensitive nerves of the market
.

　　On the other hand, if geopolitical risks are alleviated, the risk premium in oil prices is bound to be significantly reduced, and oil prices are bound to undergo a correction
.
The market is clearly divided on the trend of oil prices in the medium term
.
Compared with Goldman Sachs Group's optimistic forecast, the U.
S.
Energy Information Administration report expects Brent crude oil futures to average $68 a barrel in 2023, and Citigroup also expects Brent oil prices to fall to $54 a barrel by the end of 2023.

.

　　US National Security Council spokeswoman Emily Horn said in a statement on the 18th that the White House plans to continue to monitor energy prices in the context of global economic growth, and will hold consultations with OPEC and non-OPEC oil-producing countries if necessary
.
"We will continue to work with producers and consumers, these measures have had a real impact on prices, and we still retain the tools to address energy prices," Horn said
.
Horn said the United States is committed to working with other countries to lower oil prices and ultimately lower gasoline prices
.

　　In November 2021, the United States, in coordination with India, Japan, South Korea and other countries, announced the release of 50 million barrels of oil from the Strategic Petroleum Reserve
.
Horn said the U.
S.
government has released 18 million barrels of oil, which is expected to reach the market in February and March
.
(Comprehensive report by reporter Qin Tianhong)

　　From: Economic Information Daily