International oil prices have fluctuated again, with Brent crude oil futures breaking through the $88 per barrel mark, setting a new high since October 2014. Biden’s heart is in his throat. It will be difficult for oil prices to rise any further. After all, it took a whole year for international oil prices to achieve a 50% increase last year, but this year it only took two weeks to increase by 10%.
Why have international oil prices risen so sharply? On the one hand, U.S. crude oil inventories have continued to decline this year. As of the week of January 7, U.S. crude oil inventories fell to 413.3 million barrels for seven consecutive weeks, the lowest since October 2018.
On the other hand, relations between Russia and Ukraine are tense, and market concerns linger. Everyone is afraid that Putin will launch a sudden attack, and the whole of Europe will be in chaos.
By coincidence, an important oil pipeline between Iraq and Turkey suddenly exploded, adding fire to the hot oil market. You must know that this pipeline was able to transport 450,000 barrels of oil to Europe every day last year. Turkey said that the fire has been extinguished and the pipeline will be reopened when the finishing work is completed.
Against this background, Biden once again sold off 400,000 barrels of oil reserves. This was the fifth action taken by the United States since it announced the dumping of reserves in November last year, but the effect was average. In this regard, Biden emphasized that he still has more “tools” at his disposal, and will cooperate with OPEC+ to lower oil prices when necessary.
Having said that, will the rise in international oil prices have a big impact on the domestic market? The analysis pointed out that in order to prevent the epidemic from rebounding, various places are now advocating celebrating the New Year in situ, and domestic crude oil demand is expected to decline. In fact, my country’s crude oil imports fell by 5.4% year-on-year last year, the first decline in 20 years.
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