International crude oil prices hit a new high in April, breaking through the $70 mark
In the past six months, international oil prices have been ups and downs. However, unlike the “roller-roller-style” sharp drop pattern from October to December last year, the international oil price was mixed in 2019, and it steadily recovered. As of April 5, Brent crude oil price rose 1.35. %, not a big rise, not a jump. Standing at $70/barrel is the inevitable result of the international oil price trend since the first quarter of 2019.
The three major factors of OPEC+, the United States and the global economy have dragged on the fundamentals of supply and demand of crude oil, which has created a trend of stabilization and rise in international oil prices in the first quarter.
In December 2018, OPEC and non-OPEC oil producers announced a joint production cut. Although the initial production cuts were highly questioned by the market, the trend of gradual recovery of international oil prices in the past three months has confirmed OPEC+'s determination to reduce production. The data also shows that OPEC+'s actual production cuts exceeded expectations.
The same is the supply side. Due to the lack of pipeline capacity and the sharp drop in investment caused by the sharp drop in oil prices at the end of 2018, the US crude oil output slammed into the first place in January this year, and the daily output in January this year fell for the first time in six months, a decrease of about 90,000. Barrel/day to 11.87 million barrels.
In addition, the United States has no signs of easing sanctions against Iran and Venezuela. On the Venezuelan side, due to US sanctions and the instability of the domestic political situation, crude oil production has been decreasing for two years, falling to around 1 million barrels per day. In March, it was hit by the domestic power system, and crude oil production plummeted by 50%. It is reported that It is already less than 600,000 barrels per day.
From the perspective of supply, OPEC+ production cuts and US sanctions against the Iraqi two countries are two positive factors supporting international oil prices. From the demand side, the global economic slowdown is the main negative factor to curb the sharp rise in oil prices.