Since late December last year, crude oil prices have continued to fluctuate upward. An Ziwei, senior energy analyst at Shanghai Orient Securities Futures Derivatives Research Institute, said that there are both fundamental factors, short-term supply cuts and geopolitical influences. The factor that the market is most concerned about recently is mainly geopolitical influence.
According to Yang An, head of energy and chemicals at Haitong Futures, the impact of the Russia-Ukraine conflict on oil prices so far is mainly at the expected level. Due to the continuous actions of all parties, the geopolitical factors surrounding Ukraine continue to ferment, triggering investors’ concerns about the supply of Russian crude oil. Concerns about disruptions have pushed oil prices upward, mainly due to Russia’s irreplaceable position in the energy market. As we all know, many people blame the European natural gas crisis in 2021 on Russia’s insufficient gas supply to Europe. Russia is also one of the countries with the highest crude oil production in the world and the most important crude oil exporter in the world, which has a decisive impact on the global crude oil market. Currently, global crude oil inventories are at a 7-year low, crude oil supply is tight, and market concerns about this are at a high level. Once the situation gets out of control, a war occurs or sanctions are imposed by Western countries such as the United States and the European Union, Russian energy exports will be affected, which will inevitably intensify supply tensions. situation, which will have a huge impact on the crude oil market.
“From the beginning of the Spring Festival holiday to now, the international oil price has risen by 7-8 US dollars per barrel. The core factor is the heating up of the geopolitical situation surrounding the Ukraine issue. The United States first sent troops, and last week it released the news that Russia will invade Ukraine this week. This This has triggered market concerns about the stability of crude oil supply. If Russia-Ukraine relations deteriorate further or continue to focus on this geopolitical topic, there is no doubt that oil prices will rise further. Yang An said. ”
“The tension between Russia and Ukraine has created a geopolitical risk premium. At present, Russia’s crude oil supply has not had a substantial impact. However, as one of the world’s important crude oil producers, once exports are restricted, it is difficult for any country to fill this gap in a short time. Gap, the market’s concerns stem from this, but it is still a small probability event that sanctions or export restrictions are expected, so the risk premium is relatively moderate. The latest news is that the situation in Russia and Ukraine shows signs of easing. If there is no further escalation in the future, the risk premium will fade and the oil price will rise slightly. Pull back and return to fundamental pricing.” An Ziwei said.
In addition, An Ziwei believes that in this wave of rising prices, lower than expected supply is also an important factor boosting prices. OPEC+ maintains its plan to increase production by 400,000 barrels per day per month, but due to production bottlenecks in some countries, the continued production increase is less than expected, and the market is increasingly concerned about its ability to increase production in full. Currently, idle production capacity is concentrated in the hands of limited countries such as Saudi Arabia and the United Arab Emirates, giving them a greater say in pricing oil prices. Although OPEC+ faces external pressure, it is still weaker than in the past. An important variable on the supply side is that the United States is still slow to increase production. The number of drilling rigs has rebounded sharply in the latest week. After the inventory of wells has been significantly consumed, future production recovery will be more dependent on drilling rigs. U.S. production maintains a moderate growth trend.
“The progress of the Iran nuclear deal negotiations is another important geopolitical risk factor in the future. The return of Iranian supply is expected to be priced in the future, which may trigger a periodic price correction. However, low inventories and low idle production capacity will provide continued support to oil prices. We maintain our view on Judgment of the strong trend of oil price oscillation.” An Ziwei said.
In Yang An’s view, whether the Fed raises interest rates more than expected is also very critical to the performance of oil prices. Currently, in the face of inflation hitting a 40-year high, the pace of liquidity tightening is the focus of the market, which will directly affect the crude oil market. the direction of the entire financial market.
“Currently, the crude oil market supply has not been affected by the conflict between Russia and Ukraine for the time being, but the market is worried that the situation will get out of control, a war will break out, or Russia will invade Ukraine and trigger sanctions from Western countries, which will affect the export of Russian crude oil, natural gas and other energy products, which will further Increase the supply tension in the current energy market. On the one hand, we are worried about the soaring oil prices due to the loss of control of Russia-Ukraine relations. On the other hand, we must also guard against the risk of the eventual war expectations being disappointed. At present, except for the United States taking the initiative to create topics for the Russia-Ukraine issue The statements of the parties involved, Russia and Ukraine, are still relatively restrained, and other NATO members, Germany and France, are not willing to let the situation get out of control, so the probability of eventually easing the situation through diplomacy is not small. This may make expectations based on geopolitical speculation come to nothing, and oil prices will fall sharply. “Risk.” Yang An said that in addition, we must also pay attention to the issue of out-of-control inflation in the United States and Europe. If the United States and Europe are not strong enough to control inflation, the market may still trade high inflation expectations. In this case, oil prices will also remain The possibility of strength or further rise.
</p
