In-depth analysis of the influencing factors and future trends of oil prices will eventually meet the downward trend
Lead:
After more than four consecutive months of frequent rises, domestic refined oil prices finally ushered in a burst of cooling in late April. According to the latest market, next Monday (April 29) may see the first downward adjustment of the year, stopping the astonishing increase all the way. This has made many car owners and transportation companies breathe a sigh of relief. But can we really reverse the pattern of violent fluctuations, and where will the oil price market go in the future? This article will provide an in-depth analysis and forward-looking discussion on this.
1. Review of the dynamics of domestic oil price adjustment
1. The price has increased 5 times during the year
Since 2024, domestic refined oil prices have experienced 5 increases, of which 4 are a single increase of 200 yuan/ton, and another is an increase of 125 yuan/ton. In total, the oil price has risen by 925 yuan/ton.
2. It rose twice in a row in April
What is particularly worrying is that in April, the price of refined oil has risen intensively twice, making the wholesale price of No. 92 gasoline exceed 8,300 yuan/ton, reaching a record high of 8,335 yuan/ton.
For ordinary consumers, the cost of filling up a tank of 92 gasoline has exceeded 500 yuan. For transportation companies, the soaring cost of fuel is undoubtedly a big pressure.
3. This weekend will welcome the first drop of the year
It is gratifying that the first 8 working days of this round of price adjustment cycle show that international oil prices have continued to fall, with a decline of about 1.9%. According to this calculation, the price adjustment window next Saturday (24 o'clock on April 29) is likely to be lowered for the first time this year, and it is expected to be reduced by about 85 yuan per ton, which is equivalent to a reduction of 6-8 cents per liter in gasoline prices.
4. The market outlook is confusing
However, despite the expectation of price reduction, the recent sharp fluctuations in international oil prices have also added uncertainty to the market outlook. Just this Thursday, international oil prices rebounded briefly, narrowing the currently calculated decline.
This kind of turbulent ups and downs means that the market outlook is confusing, and a simple downward adjustment may not be sustainable, and it is likely that it will continue to fluctuate violently.
Second, the main factors affecting the sharp fluctuation of oil prices
1. Supply side
(1) Geopolitical turmoil
In recent years, wars, civil strife and other turbulent events have broken out in major oil-producing countries and regions such as the Middle East, Africa and Latin America, which have severely impacted oil production and supply. In the event of a further escalation, there is a risk that inventories will be forced to deplete, pushing oil prices higher.
(2) Investment in oil production capacity
In response to potential supply shortages, a number of major oil-producing countries and regions have stepped up investments in new oil drilling and plant development projects. However, the release of new production capacity in the short term is relatively limited, and the contradiction between supply and demand is still prominent.
(3) Extreme weather impacts
Extreme weather such as hurricanes and tornadoes often impact drilling facilities and maritime transportation in major producing areas such as the United States and the Gulf of Mexico, resulting in local supply disruptions and boosting oil prices.
2. Demand-side factors
(1) The degree of global economic prosperity
We know that as a key energy source to promote the operation of modern society, oil demand is closely related to the degree of international and domestic economic development. Once the global economy enters a recession, oil consumption will come under heavy pressure, and oil demand will be significantly reduced.
(2) Alternative new energy development
Traditional fossil energy is still difficult to be completely replaced, but renewable new energy such as solar energy, wind energy, etc. are increasingly valued, and their industrial development will inevitably divert oil demand to a certain extent, forming a potential inhibitory effect on oil prices.
(3) The progress of population urbanization
In addition, population size and urbanization are also important factors affecting oil consumption demand. The larger the population and the higher the urbanization rate, it will inevitably bring more energy consumption for transportation and civilian industry, which will stimulate the growth of oil demand.
3. Speculative factors in the capital market
(1) International futures promoter
In reality, there is a close correlation between the international oil price futures price and the spot price, and often plays the role of leader and hand-holder. If the futures price rises sharply, the spot will inevitably chase up.
(2) Petroleum asset speculation
The behavior of some financial institutions and investors will also affect the trend of oil prices, such as speculation and speculation on oil stocks, options and other financial products, which will exacerbate the short-term fluctuations in oil prices and the extent of detachment from actual supply and demand.
(3) Fluctuations in the U.S. dollar exchange rate
International oil prices are usually settled in US dollars, and the rise and fall of the US dollar exchange rate will be directly reflected in the purchase cost of other currencies, thus affecting the pressure on the supply side and the demand side, and then transmitted to the spot oil price.
4. Other uncertainties
(1) Geopolitical risks
Geopolitical risks have always been a major destabilizing factor in oil prices, and emergencies such as wars, coups, sanctions, and terrorist attacks can lead to oil supply disruptions and trigger short-term sharp fluctuations in oil prices.
(2) Major scientific and technological breakthroughs
If scientific and technological progress leads to new, cheaper and more efficient energy technologies, such as controlled nuclear fusion, it could fundamentally change the pattern of energy demand and have a significant impact on oil prices.
(3) Major catastrophic accidents
Major natural disasters and industrial accidents can also cause global or localized oil supply chains to break down and cause temporary shortages, triggering a surge in oil prices.
3. Forward-looking analysis of oil price trends in the future
1. The contradiction between supply and demand is still the main contradiction
From the perspective of supply and demand, although crude oil prices have experienced a sharp rise recently, the fundamental contradiction, that is, the contradiction between the continuous shortage of oil supply and the rapid rise in demand, has not been effectively channeled, and the gap between supply and demand is still widespread.
Therefore, even if there is a phased correction and consolidation, it is expected that oil prices will remain high in the future