International oil prices plummeted for two consecutive days! Has the global economic crisis emerged? Exclusive interview with Dong Xiucheng, professor of foreign economics and w88
(Source: "ifeng.com Finance" 2020-04-22）
Global financial markets this year"Black swans" are flying frequently, the U.S. stock market has been blown by circuit breakers four times in 10 days and the Federal Reserve's "zero interest rate" policy is still lingering. The crude w88 sports betting market on the other side is also busy rewriting history.
Local timeOn April 20, the price of U.S. West Texas Light crude w88 sports betting futures went through a jaw-dropping trend—the May (WTI5) settlement price closed at -$37.63 per barrel. It plummeted by more than 300% during the session, with the lowest price - 40.32 US dollars per barrel; this is the first time that w88 sports betting futures have fallen into negative trading since they began trading on the New York Mercantile Exchange in 1983. It also means that w88 sports betting sellers would rather "pay money" to sell to sellers, and the cost of w88 sports betting transportation and storage has exceeded the value of the w88 sports betting itself.
Beijing timeOn the evening of the 21st, investors' panic selling spread to the contract for June delivery. June WTI crude w88 sports betting futures plunged more than 60% during the session, refreshing the contract's intraday historical low to $6.57/barrel. The U.S. crude w88 sports betting fund even hit a circuit breaker downwards; further away, the price of July WTI futures also fell by about 31%, closing at a price of $18.04/barrel. Coincidentally, the June futures price of London Brent crude w88 sports betting, another indicator of international w88 sports betting prices, also fell 10.17% to US$22.97 per barrel at 9 am local time on the 21st.
As of Beijing timeClose in the early morning of the 22nd, the price of West Texas Intermediate crude w88 sports betting (WTI) futures for June delivery on the New York Mercantile Exchange fell by US$8.86, or 43.4%, to close at US$11.57 per barrel; the price of WTI crude w88 sports betting in May closed at US$10.01 per barrel, up by US$47.64, or 126.60%.
"Since this week, I have been witnessing history every day." This rare spectacle has made investors stunned, but more questions about the collapse of w88 sports betting prices are slowly emerging - why did international crude w88 sports betting futures fall so hard this time? What does the emergence of "negative w88 sports betting prices" mean for the global crude w88 sports betting market? Is this a precursor to a global economic crisis? Will domestic w88 sports betting prices be affected by this?
With these questions, ifeng.com Finance recently conducted an exclusive interviewDong Xiucheng, professor at the w88 casino of International Business and Economics at the w88 casino and researcher at the Institute for Opening up, for the overnight surge in international crude w88 sports betting pricesDong Xiucheng bluntly called the "negative" phenomenon a "shocking event"; he said that the current drop in w88 sports betting prices to negative numbers is actually a continuation of the recent plunge in w88 sports betting prices, which fully reflects the serious imbalance between supply and demand in the U.S. w88 sports betting and gas market. "The United States is the world's largest w88 sports betting and gas consumer market. Americans mainly rely on cars and airplanes to travel. However, the severe epidemic situation has led to the closure of cities in various places and the shutdown of economic activities. w88 sports betting consumption has plummeted, inventory backlogs are serious, and inventory costs have skyrocketed. Once you have crude w88 sports betting in your hands, the cost of keeping it is huge."
For this timeDong Xiucheng also said that the reason for the emergence of "negative w88 sports betting prices" is that the futures market itself belongs to the financial category, and the entities engaged in crude w88 sports betting trading activities on the exchange mainly include two categories: physical enterprises and financial institutions. "There are differences in the functions of these two types of companies trading on exchanges. That is to say, w88 sports betting sellers may not have w88 sports betting in their hands, while w88 sports betting buyers may not need w88 sports betting. Entity companies mainly focus on hedging, while financial institutions mainly focus on speculation." Dong Xiucheng told reporters, "According to the rules of exchange futures contracts, delivery or settlement must be made after expiration. For traders who hold futures contracts but do not really want to obtain w88 sports betting, there will always be delivery. Sell the contract before the expiration date, otherwise you will be faced with the problem of how to deal with the physical w88 sports betting once the w88 sports betting is in your hands. Under the current market conditions, if you have an expired crude w88 sports betting contract and the inventory cost remains high, you will suffer huge losses, so you will ship the contract at all costs. Under this difficult choice of choosing the lesser of two evils and minimizing the loss, such a seemingly absurd event occurred. ”
The crude w88 sports betting market has collapsed for two consecutive days, and the crude w88 sports betting spot that is about to be delivered has become a hot topic among tradersThe existence of a "hot potato" also reflects the market's deep-seated concerns about the operation of the global economy. Dong Xiucheng said frankly that the w88 sports betting price plunge indicates that investors are not optimistic about the future economic development trend, have serious lack of confidence or are extremely pessimistic, and are even worried that the global economy may gradually turn from recession to depression, and worry about a repeat of the global economic depression in the 1930s. He pointed out that the w88 sports betting price plunge actually means "a severe loss of some financial capital" or "evaporation of financial assets" in the futures market, which will definitely intensify the turmoil in the capital market. ”
"The collapse of w88 sports betting prices has triggered the collapse of the U.S. shale w88 sports betting and gas industry, which is backed by huge capital markets. A large number of shale w88 sports betting and gas companies may be unable to repay due to the maturity of huge debts, resulting in a serious break in the corporate capital chain, which will directly impact the capital market." Dong Xiucheng said, "The plunge in w88 sports betting prices may cause financial crises for w88 sports betting resource countries such as Saudi Arabia, Kuwait, and the United Arab Emirates. These resource countries may sell petrodollar assets, allowing huge petrodollars to flow back to their countries, which will lead to a liquidity crisis in the U.S. financial market."
The severe oversupply situation in the U.S. w88 sports betting market has obviously attracted strong attention from the Trump administration. at local timeAt the press conference on April 20, Trump bluntly stated that he would consider purchasing 75 million barrels of crude w88 sports betting for the country's strategic reserves, "buying up" the reserve inventory, and considering stopping the delivery of w88 sports betting from Saudi Arabia to the United States when the market is oversupplied. At the same time, he also claimed that the drop in w88 sports betting prices was a "short-term tightening" and mainly a financial phenomenon. "Many people were found" to be short-selling, and now is a good time to buy crude w88 sports betting.
ThenIs it wise to "buy, buy, buy"? Dong Xiucheng told Ifeng.com that on the surface Trump is concerned about the U.S. w88 sports betting and gas industry, but in fact he is most concerned about the huge capital behind the shale w88 sports betting and gas industry, because once a debt default occurs, it will intensify the turmoil of the U.S. capital market and affect his re-election goal. "Currently, the OPEC+ production reduction agreement has been reached, but w88 sports betting prices have not yet stabilized. Therefore, Trump's concerns have not yet been resolved. He is likely to take other measures, such as increasing the US strategic petroleum reserve and purchasing large amounts of w88 sports betting on the market to stabilize market supply and demand. This will of course require Congressional approval to increase the government budget before it can be implemented." Dong Xiucheng said, "In addition, it is possible to consider reducing crude w88 sports betting imports, such as imposing import tariffs or directly stipulating the implementation of policies such as stopping the import of Saudi crude w88 sports betting; it is also possible to consider encouraging U.S. w88 sports betting and gas producing states such as Texas to implement crude w88 sports betting production quota policies through local legislation. However, this approach runs counter to the long-standing market rules of the United States, and it may be very difficult to do."
It is worth noting that the crude w88 sports betting market has suddenly emerged“Negative w88 sports betting prices” are also related to the uncertainty caused by non-market factors over the past two months. On March 6 this year, after the negotiation between OPEC+ and Russia on further production restrictions broke down, Saudi Arabia subsequently launched a unilateral "price war", and the price of Brent crude w88 sports betting fell below US$25 per barrel in less than two weeks; on April 2, Trump declared on Twitter that Saudi Arabia and Russia are expected to The agreement to reduce production ended the public opinion of this w88 sports betting "price war". The price of Brent crude w88 sports betting once jumped to 36.29 US dollars per barrel. In the end, OPEC, Russia and other w88 sports betting-producing countries reached an agreement to reduce production and agreed to cut global supply by 10% in order to support w88 sports betting prices during the COVID-19 epidemic.
The drop in w88 sports betting prices has undoubtedly hit the U.S. shale w88 sports betting and gas industry hard. Is it possible that it will lead to joint actions by Saudi Arabia, Russia and the United States in the future? Dong Xiucheng said that Saudi Arabia, Russia and the United States are currently the world's three largest w88 sports betting-producing countries, with roughly the same production scale. If these three countries unite to stabilize the market, they will have great confidence in controlling market supply and demand and price levels. But he also pointed out that there are obvious differences in the governance systems and mechanisms between the United States, Saudi Arabia and Russia. The United States believes in the principle of market competition and its crude w88 sports betting production"Mobility" does not belong to the government but to the market. If production reduction occurs, it is also an independent market operation behavior of enterprises; Saudi Arabia and Russia can formulate production reduction plans and quotas through government administrative intervention. The "mobility" of their crude w88 sports betting production comes from the government rather than the market.
“Therefore, it is unlikely that the U.S. government will directly join a non-market mechanism like the ‘Production Reduction Alliance’, and it is unlikely to establish a cooperative production reduction alliance with Saudi Arabia and Russia. However, with the evolution of w88 sports betting prices and the evolution of global w88 sports betting supply and demand, on the basis of the interests of both parties, Saudi Arabia and Russia will continue to cooperate to maintain reasonable prices and stabilize the w88 sports betting and gas market. This will be their inevitable choice.” Dong Xiucheng said.
The following is the transcript of the interview between Phoenix Finance and Dong Xiucheng:
ifeng.com Finance: local timeOn April 20, the price of U.S. May light crude w88 sports betting futures WTI plummeted to a record low, plummeting $55.90 and closing at -$37.63 per barrel, a drop of 305.97%. In your opinion, why did international crude w88 sports betting futures fall so sharply this time? What are the main factors causing it?
Dong Xiucheng:This w88 sports betting price plummeted to negative values, which can be described as a shocking event. It is the first time this has happened since the establishment of the w88 sports betting futures market. It will definitely remain in the memory of the history of the world w88 sports betting market and has iconic significance. this timeThe outbreak of the "black swan" incident, or the w88 sports betting price plummeting to such an extent, is actually a continuation of the recent w88 sports betting price collapse, which fully reflects the reality of the serious imbalance between supply and demand in the U.S. w88 sports betting and gas market. The United States is the world's largest w88 sports betting and gas consumer market. Americans mainly rely on cars and planes to travel. However, the severe epidemic situation has led to the closure of cities in various places and the shutdown of economic activities. w88 sports betting consumption has plummeted, inventory backlogs are serious, and inventory costs have skyrocketed. Once you have crude w88 sports betting in your hands, the cost of keeping it is huge.
The futures market itself belongs to the financial category. The entities engaged in crude w88 sports betting trading activities on the exchange mainly include two categories: entity enterprises (w88 sports betting and gas enterprises, such as w88 sports betting refining enterprises) and financial institutions (investment companies, investment banks, funds, financial companies, etc.). There are differences in the functions of these two types of enterprises in exchange transactions. That is to say, w88 sports betting sellers may not have w88 sports betting in their hands, and w88 sports betting buyers may not need w88 sports betting. Entity enterprises mainly focus on hedging, while financial institutions mainly focus on speculation. According to the rules of futures contracts on the exchange, delivery or settlement must be made after expiration. For traders who hold futures contracts but do not really want to obtain w88 sports betting, they will always sell the contract before the delivery date. Otherwise, once the w88 sports betting is held in their hands, they will face the trouble of how to dispose of the physical w88 sports betting. Under the current market conditions, if you have an expired crude w88 sports betting contract that cannot be sold, and the inventory cost remains high, you will suffer huge losses, so you will ship the contract at all costs. Under this difficult choice of choosing the lesser of two evils and minimizing losses, such seemingly absurd events occurred.
ifeng.com Finance:What does “negative w88 sports betting prices” mean to you? What does this landmark event reflect on the current situation of the global crude w88 sports betting market that cannot be ignored?
Dong Xiucheng：The "negative w88 sports betting price" incident itself is a special product under the current severe global epidemic situation, especially the current economic shutdown in the United States, and the serious imbalance between w88 sports betting and gas supply and demand. The emergence of such a strange price phenomenon may not be very surprising. WTI crude w88 sports betting futures prices mainly reflect the supply and demand relationship in the U.S. market. The emergence of this peculiar price event does not mean that the global w88 sports betting and gas market is the same as that of the United States. In other words, we cannot regard this extreme event as a comprehensive reflection of the global w88 sports betting and gas market. The thinking of "one point to make an impact" is not advisable.
However, the occurrence of this incident is enough to make us realize that the oversupply situation in the global w88 sports betting market is indeed very serious. Consumption has declined rapidly due to the spread of the epidemic. If it lasts longer, the w88 sports betting and gas market situation will become more uncertain, which requires the attention of countries around the world and measures must be taken to deal with it. Whether it is an w88 sports betting and gas resource country or an w88 sports betting and gas consumer country, this w88 sports betting price situation is actually not good, and no country can be immune to it.
ifeng.com Finance:Does “negative w88 sports betting price” indicate that the global economic crisis has begun to emerge? How will the plunge in crude w88 sports betting futures affect global capital markets?
Dong Xiucheng:w88 sports betting prices, like the capital market, have always been an economic barometer, and its changes reflect the changing trends of the economic situation. This is an objective fact. This plunge in w88 sports betting prices indicates that investors are not optimistic about the future economic development trend, and have serious lack of confidence or are extremely pessimistic. They are even worried that the global economy may gradually turn from recession to depression, and they are worried that in the last centuryA repeat of the global economic depression of the 1930s.
In addition, the crude w88 sports betting futures market itself is an important part of the world financial system, and the collapse of w88 sports betting prices itself is also one of the manifestations of the turmoil in the global capital market. The plunge in w88 sports betting prices actually means a severe loss of some financial capital in the futures market, or the evaporation of financial assets, which will of course intensify the turmoil in the capital market. In addition, the collapse of w88 sports betting prices has triggered the collapse of the U.S. shale w88 sports betting and gas industry, which is backed by huge capital markets. A large number of shale w88 sports betting and gas companies may be unable to repay due to the maturity of huge debts, resulting in a serious break in the corporate capital chain, which will directly impact the capital market. In addition, the plunge in w88 sports betting prices may cause financial crises for w88 sports betting resource countries such as Saudi Arabia, Kuwait, and the United Arab Emirates. These resource countries may sell petrodollar assets, allowing huge petrodollars to flow back to their countries, which will lead to a liquidity crisis in the U.S. financial market.
Ifeng Finance: In response to the sharp drop in international crude w88 sports betting prices, U.S. President Trump said that the drop in w88 sports betting prices will be very short-term and that now is a good time to buy crude w88 sports betting. He hopes that the U.S. Congress can provide support; at the same time, he is also studying how to increase the price of crude w88 sports betting.75 million barrels of w88 sports betting are included in the strategic petroleum reserve, and opinions on stopping the import of Saudi w88 sports betting will be considered. What do you think of this approach?
Dong Xiucheng: Trump is paying great attention to international w88 sports betting prices this time, which is obviously different from other presidents in history. For a long historical period, the U.S. government adopted a laissez-faire attitude toward international w88 sports betting prices, and evenOPEC is an organization that maintains stable w88 sports betting prices by limiting production. It hates this kind of direct administrative intervention in the w88 sports betting and gas market. It believes that this kind of direct administrative intervention in the w88 sports betting and gas market violates the rules of the market economy and is unacceptable. It has even exerted diplomatic pressure on OPEC many times in an attempt to hope that this organization can be disbanded as soon as possible. Since the collapse of w88 sports betting prices, Trump has been very concerned. On the surface, he cares about the U.S. w88 sports betting and gas industry. In fact, he is most concerned about the huge capital behind the shale w88 sports betting and gas industry. He is worried that a debt default will exacerbate the turmoil in the U.S. capital market and affect his re-election goal. Therefore, President Trump had a phone call with Putin and the King of Saudi Arabia and directly intervened in w88 sports betting price issues. He hoped that the OPEC+ production reduction mechanism would continue to play a role and that w88 sports betting prices could be stabilized as soon as possible.
Currently,The OPEC+ production reduction agreement has been reached, but oil prices have not yet stabilized. Therefore, Trump’s concerns have not been resolved. He is likely to take other measures, such as increasing the U.S. strategic petroleum reserve and purchasing large amounts of oil on the market to stabilize market supply and demand. This will of course require Congress to approve an increase in the government budget before it can be implemented. In addition, he may also consider reducing crude oil imports, such as imposing import tariffs. Or directly stipulate the implementation of policies such as stopping the import of Saudi crude oil. This approach is certainly not in line with the rules of the World w88 Organization, but for Trump, violating WTO rules is not unprecedented; of course, Trump may also consider encouraging U.S. oil and gas production states such as Texas to implement crude oil production quotas through local legislation. However, this approach runs counter to the market laws that the United States has long adhered to, and it may be very difficult to do.
Ifeng.com Finance: OPEC and RussiaAfter the w88 sports betting war in March, the largest production reduction agreement in history was just reached in April, but this failed to prevent the free fall of crude w88 sports betting prices. In your opinion, judging from the current situation on the demand side of crude w88 sports betting, can cutting global supply really change the direction of w88 sports betting prices? How long will this drop in w88 sports betting prices last?
Dong Xiucheng:The main feature of this w88 sports betting price plunge is that there is a problem on the w88 sports betting consumer side, that is to say, while the supply capacity remains unchanged, consumer demand has dropped off a cliff. To truly solve the problem, it is impossible to rely solely on supply-side production cuts.This is the first time in history that the OPEC+ production reduction agreement has reduced production by 6.7 million barrels per day. However, it is still difficult to make up for the rapid decline of more than 20 million barrels per day on the consumer side. The serious imbalance between supply and demand has not fundamentally changed, so it is impossible for w88 sports betting prices to truly rebound to the level before the outbreak. However, after the production reduction agreement is implemented on May 1, it is expected to curb the downward trend of w88 sports betting prices. w88 sports betting prices may rise back to around US$30, but the probability of further rises will be very small unless a major geopolitical event occurs. Of course, how long this low w88 sports betting price will last mainly depends on the duration of the epidemic, the process and time of the gradual economic recovery, etc. It is impossible to make a clear judgment at present.
Ifeng.com Finance: Do you think it is possible for Saudi Arabia, Russia and the United States to work together to save the w88 sports betting market in the future?
Ifeng.com Finance: Saudi Arabia, Russia and the United States are currently the three largest w88 sports betting-producing countries in the world, and their production scale is roughly the same, basically every dayWith a scale of 11 million barrels, they can be called the three major "mobile w88 sports betting producers" in the global w88 sports betting and gas market. In other words, if these three countries unite to stabilize the market, they will have a lot of confidence in controlling market supply and demand and price levels. However, there are obvious differences in the governance systems and mechanisms between the United States, Saudi Arabia, and Russia. The United States believes in the principle of market competition. The "mobility" of its crude w88 sports betting production does not belong to the government but to the market. If production reduction occurs, it is also an independent market operation behavior of enterprises. Saudi Arabia and Russia can formulate production reduction plans and quotas through government administrative intervention, and their crude w88 sports betting production "mobility" comes from the government rather than the market. Therefore, in my opinion, it is unlikely that the U.S. government will directly join a non-market mechanism such as the "Production Reduction Alliance", and it is unlikely that it will establish a cooperative production reduction alliance with Saudi Arabia and Russia. However, with the evolution of w88 sports betting prices and the evolution of global w88 sports betting supply and demand, Saudi Arabia and Russia will continue to cooperate to maintain reasonable prices and stabilize the w88 sports betting and gas market on the basis of the interests of both parties. This will be their inevitable choice.
ifeng.com Finance:On April 28 (next Tuesday), a new round of refined w88 sports betting price adjustment window will be opened in China. What impact will this "negative w88 sports betting price" have on the adjustment of domestic w88 sports betting prices?
Dong Xiucheng:On April 28, domestic refined w88 sports betting reached the price adjustment window again. However, according to the current refined w88 sports betting price policy, when the international crude w88 sports betting price is lower than 40 US dollars per barrel, the price of gasoline and diesel will not be reduced. Therefore, when the recent w88 sports betting price is basically below 40 US dollars, domestic refined w88 sports betting prices will not be adjusted.
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