(Source: w88 online live casino News Service 2024-06-04)

After being calm for a period of time, international oil prices have seen a new trend.

According to the official website of OPEC (Organization of Petroleum Exporting Countries), on the 2nd local time, OPEC+ (Organization of Petroleum Exporting Countries and its partners) held its 37th ministerial meeting. Eight OPEC+ member states, including Saudi Arabia, Russia, and Iraq, have agreed to extend the current voluntary production reduction measures to maintain the stability and balance of the international oil market.

w88 online live casino News Finance has noticed that after the above-mentioned production reduction measures were announced, international oil prices did not stop falling and rebounded. Brent crude oil futures fell successively on the 3rd and 4th trading days, falling below the $80 mark, hitting a new low in the past four months. In the past two months, the price of Brent crude oil futures has fallen below the two major levels of 90 and 80 US dollars, a drop of more than 15%.

Why does the extension of production cuts not have immediate effects?

Experts believe that reaching an agreement does not mean that production cuts can be implemented smoothly.

Dong Xiucheng, Executive Dean of China International Carbon Neutral Economic Research Institute, w88 casinotold w88 online live casino News Finance that OPEC is defined as a "cartel" in international academic terms. This type of organization usually appears in oligopolistic markets and is established to avoid fierce conflicts among oligarchs. Since there is no binding mechanism and there are no penalties for member states not complying with the agreement, even if the agreement is signed, it may not be well implemented.

Wang Lining, director of the Oil Market Research Institute of the w88 online live casino National Petroleum Corporation Economic and Technology Research Institute, said that historically, it is normal for some countries in the OPEC organization to reduce production or implement settlements less than expected. To make up for this impact, countries such as Saudi Arabia and Russia have introduced stricter voluntary production reduction measures to alleviate the impact of insufficient production reductions by other oil-producing countries.

"Restricting production is OPEC's response measure after judging the international crude oil supply and demand situation. If production restrictions are not maintained, international oil prices will not be sustained."Dong XiuchengIt seems that the production restriction measures introduced by OPEC+ this time are relatively mild, and international oil prices may still continue the downward trend some time ago.

What is the motivation behind the production restriction measures?

In this regard, Wang Lining analyzed that the motivation behind OPEC+’s production restriction measures is to keep international oil prices at a high level. Most of the main income of the economies of the organization’s member countries rely on the oil industry, and the higher the oil price, the better.

Specifically, eight OPEC+ member states decided to extend the voluntary production reduction measures of 2.2 million barrels per day announced in November 2023 to the end of September 2024, and will then gradually withdraw this part of the production reduction depending on market conditions. In addition, the eight countries will extend the voluntary production reduction measures of 1.65 million barrels per day announced in April 2023 to December 2025.

According to Wang Lining's calculations, OPEC+ member countries have reduced production by an average of 2.2 million barrels per day, accounting for about 5% of their total production. From a global economic perspective, if the above measures are effective in rebounding oil prices, they may push up inflation in some developed countries. Otherwise, they will reduce inflation, further having a potential impact on the Federal Reserve's monetary policy.

What impact will it have on domestic oil prices?

According to the existing pricing rules, there is a linkage mechanism between domestic oil prices and international oil prices, which are adjusted every 10 working days. At the same time, domestic oil prices will not rise indefinitely with the fluctuations of international oil prices; conversely, they will not fall indefinitely. The upper limit of the regulation is US$130 per barrel and the lower limit is US$40 per barrel.

w88 online live casino News Finance has noticed that the current international oil prices are far from the upper and lower limits of domestic regulation, and domestic refined oil products will be adjusted normally according to the mechanism. During this cycle, according to agency estimates, as of the fourth working day on the 4th, the average price of the reference crude oil variety was US$79.22 per barrel, with a change rate of -2.88%. The corresponding domestic retail price of gasoline and diesel should be reduced by 145 yuan per ton, equivalent to a price increase of approximately 0.13 yuan.

Driven by the global green transformation, renewable energy technologies represented by solar energy, water energy, wind energy, etc. are developing rapidly. These energy sources have been widely used around the world due to their clean and sustainable characteristics. Today, new energy vehicles and other products are rapidly gaining popularity in my country, further reducing dependence on fossil fuels.

“Since last year, investment in the traditional oil and gas industry has been declining.”Dong Xiuchengtold Sino-Singapore Finance that the industry has made predictions about the development speed of renewable energy, and energy giants may reduce investment in oil and natural gas production capacity as a result, further causing an impact on the production capacity and supply capacity of petrochemical fuels.

However, according to his judgment, it is difficult to grasp the balance point between renewable energy and fossil energy. The corresponding production capacity has rebounded recently and is likely to remain volatile in the future.

Attachment: Original link

https://mbd.baidu.com/newspage/data/landingsuper?rs=278673658&ruk=jcWcu8AauXF65ksil0gBRQ&urlext=%7B%22cuid%22%3A%220avEa_8EB8_du-aNlu2Wu_uT2u09i v8sl8Hyu_P6vuKa0qqSB%22%7D&isBdboxFrom=1&pageType=1&sid_for_share=&context=%7B%22nid%22%3A%22news_9111877374356357034%22,%22sourceFrom%22%3A%22search%22%7D