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Deducting the depreciation of the dollar, the current price of oil has exceeded 70 US dollars. In addition to inflation, the price of oil is close to the price of the second oil crisis. It can be said that we have entered the period of high oil prices.
Looking back at this round of the market from 2002 to the present, international oil prices have nearly tripled, while the U.S. dollar index has fallen by 30% over the same period. Due to the depreciation of the U.S. dollar, between 2002 and 2006, there was a difference of 22.8 percentage points between the increase in the price of commodities denominated in USD and the increase in commodity prices calculated using the SDR, that is, during this period, the U.S. dollar depreciated by 22.8% against a basket of currencies. This year, the depreciation rate of the US dollar against a basket of currencies has also reached 10%. It is roughly estimated that there are more than 30% of the "dollar depreciation premium" in oil prices since 2002. After deducting this premium, the oil price should be more than 70 US dollars, while the international oil price was less than 30 US dollars at that time. In contrast, the current price of oil is already in a very high position.
Historically, international oil prices have experienced three major surges: The first oil price increase occurred in the first oil crisis in 1974, and the price of oil rose from a maximum of less than US$3 per barrel in 1973 to over 13 US dollars; The second oil crisis occurred in the late 1970s and early 1980s. The price of oil rose from about $15 a barrel in 1979 to a maximum of $39 in February 1981; the third time was in 1990. In the crisis, oil prices have also skyrocketed.
At present, the United States imports crude oil at a price of 80 US dollars per barrel, and after accounting for inflation factors, the United States imported crude oil at a price of 93 US dollars per barrel in the second oil crisis. The price of imported crude oil in the Gulf crisis was less than 52 US dollars per barrel. It can be seen that the current price of oil has far surpassed the price during the Gulf crisis, and the price of chasing the second oil crisis has given people the feeling of "invincibility at high altitudes."
It is expected that global economic growth will increase by 4.8% to 4.9% next year, and oil demand will increase by 1.3 million to 2 million barrels per day, a strong historical growth. On the supply side, non-OPEC production is disappointing, and OPEC’s increase in production is faltering. Non-OPEC production is expected to increase by 1 million barrels/day next year, which is lower than the 1.3 million to 2 million barrels per day demand increase. The international community expects that global crude oil demand for OPEC will increase by 1.34 million barrels per day this year, while OPEC expects to reduce it by 230,000 barrels per day. As a result, the attitude toward increasing production is slim. On December 6, OPEC, which had just announced that it maintains its current output, reported again that it might cut production. As domestic consumption has increased steadily, output growth has stagnated, and OPEC’s exports have been declining this year and next.
Historically, in 1999 and 2002, the oil market experienced supply shortages. However, OPEC’s price cuts during low oil prices, and this year’s supply falls short of high oil prices, means that this supply and demand relationship will not happen overnight. Can change, high oil prices are relatively sustainable.
The oil price inflection point may appear in 2010.
Next year, the United States will conduct a presidential election. In the contest between the Republican Party and the Democratic Party, the public is generally optimistic about the Democratic Party's victory. If the Democratic Party wins, in the second year of its coming to power, that is, after the political situation stabilizes in 2010, the Democratic Party will certainly take various measures to intervene in oil prices in order to guarantee the interests of the middle and lower classes it represents; at the same time, the depreciation trend of the US dollar. It may also be contained. By then, there will be an inflection point in oil prices, which coincides with the development cycle of the world economy and the timing of the production of large quantities of oil investment capacity since the rise of oil prices. However, judging from the fact that the fluctuations in the world economy have become smaller in recent years, the rate of decline in oil prices will not be too large. It may only be about 60 US dollars returning to normal supply and demand.
Global oil prices
To date, the price of "WTI" produced in western Texas has been standing above USD 80 per barrel for more than 2 months, and over USD 90 for more than 1 month. In November, when oil prices hit new highs and frequently tested the 100-dollar mark, the oscillations also intensified. At present, although WTI has fallen to the first line of 90 US dollars per barrel after undergoing a continuous sharp decline, the basis of high oil prices will not be shaken. For a long time, oil prices will operate at high levels, and every major profit will be good. It may still hit the hundred-dollar mark.