The price of WTI New York crude oil exceeded the US$80 mark, and soared to US$82.18 per barrel on Monday. This is the highest value reached in New York crude oil prices in seven years since October 2014. The price of Brent crude oil has fluctuated around US$80 for days. As of this writing, it was US$84.60, reaching a new high in the past three years and approaching the stage peak of US$86.74 in October 2018.
As international oil prices rise, at 24:00 on October 9, domestic refined oil prices Ushered in the 19th adjustment this year. According to the National Development and Reform Commission, gasoline prices will increase by 345 yuan per ton and diesel prices will increase by 330 yuan per ton. This is the largest increase in domestic oil prices this year. On a national average, No. 92 gasoline will increase by 0.27 yuan per liter; No. 95 gasoline will increase by 0.29 yuan per liter; and No. 0 diesel will increase by 0.28 yuan per liter. Based on the estimated capacity of a typical household car fuel tank of 50L, it will cost an extra 13.5 yuan to fill up a tank of No. 92 gasoline.
Fossil energy is currently in a tight supply situation in the global market. Natural gas prices in Europe have reached record levels, and in the UK, the “epicenter”, wholesale natural gas prices have hit record highs, leading to the suspension of operations of many energy companies and the suspension of production in many industries.
The British National Grid reported that the UK will face tight power supply this winter, and the remaining power capacity during peak demand periods may be reduced to the lowest level since 2016.
In the United States, natural gas prices have reached their highest value in the past seven years, and prices may continue to rise after the peak winter heating season.
Due to the soaring gas prices, the market is worried that high natural gas prices will push up oil consumption, stimulating the rise in oil prices. With the effective control of the COVID-19 epidemic, many countries in Europe and the United States have canceled or relaxed travel controls, and the demand for oil in the transportation sector has increased significantly. Global economic recovery is faster than expected, driving demand for crude oil.
From the supply side, in the face of the recent rising oil prices and energy supply shortages, the market believes that OPEC+ related countries will increase production.
However, at the meeting of OPEC and non-OPEC oil-producing countries held on October 4, the participating countries decided to continue to implement the previously agreed production increase plan, that is, to maintain a low production increase rate of 400,000 barrels per day. OPEC’s decision not to take significant steps to increase production pushed oil prices higher.
Goldman Sachs raised its year-end oil price target to US$90, while Bank of America predicted that as the energy crisis has spread to the world, oil prices may reach US$100 per barrel by the end of the year. Analysts believe that the OPEC meeting in the next two months will be very critical as to how oil prices will trend. </p
