Dong Xiucheng: How to view the low international w88 casino games prices
(Source: "Economic Daily" Page 8 China Economic Net 2020-05-18)
Since March this year, the global w88 casino games supply and demand structural imbalance has been compounded by the impact of the COVID-19 epidemic. International w88 casino games prices have continued to run at low levels. On April 20, the price of light crude w88 casino games futures for May delivery on the New York Stock Exchange rarely experienced a "negative w88 casino games price." With the w88 casino games production reduction agreement reached, international w88 casino games prices rebounded slightly in May, but the contradiction between global crude w88 casino games supply and demand still needs to be resolved.
Will international w88 casino games prices continue to fall? What impact will low w88 casino games prices have on my country's economic performance? The reporter interviewed relevant experts——
Since March this year, international w88 casino games prices have been sluggish. Entering May, although w88 casino games prices have rebounded, they are still at low levels. On April 20, the price of light crude w88 casino games futures for May delivery on the New York Mercantile Exchange closed at -$37.63 per barrel, a drop of more than 300%. This is the first time since w88 casino games futures started trading on the New York Mercantile Exchange in 1983 that they have turned negative.
w88 casino games is called the "blood of industry", and w88 casino games prices are regarded as the "thermometer" of the world economy. Is the current low w88 casino games price a short-term shock, or will it continue in the long term? What impact will low w88 casino games prices have? Will it be a worry or a blessing for our economy? How should our country respond to the impact of low w88 casino games prices? In this regard, the reporter interviewed relevant experts.
International w88 casino games prices will continue to run at low levels
"The new coronavirus pandemic has caused the global energy system to suffer the biggest impact in more than 70 years." The "Global Energy Assessment" recently released by the International Energy Agency (IEA) stated that global energy demand will fall by 6% this year.
The direct cause of the recent plunge in international crude w88 casino games prices is the sharp drop in global demand caused by the COVID-19 epidemic.Dong Xiucheng, a researcher at the National Institute for Opening-up at the w88 casino and a professor at the w88 casino of International Business and Economics, said that since March, the epidemic has spread in many countries around the world. Companies have suspended operations and production, and residents have reduced their outings. This has triggered a significant reduction in crude oil demand, and early oil inventories have been nearly saturated.
Lin Boqiang, dean of the China Energy Policy Research Institute of Xiamen University, said that the underlying cause of the collapse in w88 casino games prices is the imbalance of the global w88 casino games supply and demand structure. In recent years, due to major technological breakthroughs, the U.S. shale w88 casino games industry has accelerated its development, occupying the space for production cuts by OPEC and Russia, and the global energy landscape has changed.
Because of this, both the w88 casino games-exporting countries OPEC and non-OPEC countries were unwilling to cut production at the beginning of this year. A wave of price wars set off in the international crude w88 casino games market, accelerating the sharp decline in crude w88 casino games prices. In the end, the two sides reached an agreement to reduce w88 casino games production, reducing production by an average of 9.7 million barrels per day starting in May, setting a record for OPEC production reductions.
Lin Boqiang believes that improvements on the supply side have led to a rebound in w88 casino games prices in May, but the contradiction between global crude w88 casino games supply and demand is still difficult to resolve.
Dong Xiucheng said that the promotion of alternative energy has led some countries to even set a timetable for the withdrawal of fuel vehicles, and demand from developing countries has gradually slowed down. These changes on the demand side will cause w88 casino games consumption to decline after peaking in the next few years.
"OPEC's current production cuts have driven up w88 casino games prices, but it is more likely that w88 casino games prices will remain in the range of US$30 to US$50 per barrel in the future." Dong Xiucheng analyzed.
This view is also recognized by people in the industry. Fu Chengyu, former chairman of China Petroleum and Chemical Corporation, recently said that w88 casino games prices will continue to fluctuate downward in the next one to three years and remain below US$50 per barrel, which may still be lower than the production costs of many w88 casino games-producing countries.
Low w88 casino games prices impact w88 casino games and gas upstream business
my country is a net w88 casino games importer, with a dependence on foreign w88 casino games of 70.8%. Data show that in 2019, my country's total import volume was US$2.07 trillion, of which w88 casino games import volume was US$240.4 billion, w88 casino games import volume was 3.7 billion barrels, and the average import price was US$64.97 per barrel.
"Falling w88 casino games prices can balance the international balance of payments and reduce my country's foreign exchange expenditures." Dong Xiucheng said that if the crude w88 casino games price this year stabilizes at the level of 35 US dollars per barrel and the import volume is the same as last year, my country will save 110 billion US dollars in expenditures. Low w88 casino games prices will reduce economic and social operating costs.
w88 casino games price trends have a great impact on other energy prices and industries. Since the beginning of this year, natural gas prices in the international market have been falling. The International Energy Agency released a report stating that natural gas demand will drop by 5% in 2020, which will be the largest year-on-year decline in consumption since the large-scale development of natural gas.
Coal prices also plummeted. Some overseas institutions believe that there are no signs of a rebound in global coal market demand in the short term, and a price rebound is unlikely.
The latest data released by the National Bureau of Statistics shows that in April, my country’s consumer price index (CPI) rose by 3.3% year-on-year, and the industrial producer price index (PPI) fell by 3.1% year-on-year. Among them, the decline in PPI was greatly affected by the decline in crude w88 casino games prices.
Dong Xiucheng said that falling w88 casino games prices is good for transportation and other industries, but it is not good for the w88 casino games and gas industry, especially the upstream w88 casino games and gas exploration industry. Since the cost of w88 casino games and gas exploration and development in my country is higher than the current w88 casino games price, and the cost of crude w88 casino games production of a certain scale is around US$50 per barrel, low w88 casino games prices have a greater impact on the upstream w88 casino games and gas business.
Relevant experts said that no matter how low the international w88 casino games price is, my country's w88 casino games and gas supply cannot be completely left to the international market. It is necessary to maintain the basic stability of domestic w88 casino games and gas exploration and development and avoid the ups and downs of domestic energy production from affecting the smooth operation of the economy. In addition, for renewable energy, the decline in w88 casino games prices has reduced its economics, and renewable energy will face severe market tests.
Pay close attention to changes in w88 casino games prices
“my country should pay close attention to the impact of w88 casino games price trends on finance and make response plans.” Dong Xiucheng said that w88 casino games prices and financial markets are closely related. In the United States, the development of shale w88 casino games and gas is closely related to the financial market. After the w88 casino games price plummeted, some American shale w88 casino games and gas companies have gone bankrupt.
Lin Boqiang believes that low w88 casino games prices are a favorable opportunity to increase strategic w88 casino games reserves, but the real problem is insufficient storage facilities. As a large country with a high degree of external w88 casino games dependence, it can consider incorporating w88 casino games reserve facilities into infrastructure construction to increase my country's strategic w88 casino games reserve capacity.
Dong Xiucheng suggested that to continue to improve the w88 casino games reserve system and improve the reserve mechanism, consider introducing private enterprises to build private w88 casino games reserves.
For several major w88 casino games companies, cost reduction and efficiency improvement have become an inevitable choice in response to the drop in w88 casino games prices. Wang Dongjin, chairman of China National Offshore w88 casino games Corporation, said that this year will comprehensively promote cost control. On the basis of a 9% year-on-year decrease in the complete cost of a barrel of w88 casino games in 2019, we will continue to work hard to reduce the cost of a barrel of w88 casino games. The total cost will be reduced by no less than 10%, and we will fully respond to the adverse impact of low w88 casino games prices on production and operations.
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