Global oil prices continue to fall, whether domestic affected?

Global oil prices continue to fall, whether domestic affected? Is there hope for a return to the six-yuan era?

In the first half of 2019, the oil price, which many car owners worry about, continued to rise,  people's travel costs also increased. The world oil price directly affects the domestic oil price due to many factors. Many car owners in China are considering alternative modes of transportation due to rising fuel prices.

According to official data, domestic refined oil prices experienced 15 adjustments in the first half of the year. The price rose ten out of fifteen times, fell only two times,  ran aground three times. Take gasoline 95 for example. In the first half of 21st, the price of gasoline was around $6.4 per liter.

Gasoline 95 has reached 7.5 yuan a litre in many parts of the country since oil prices rose in late July. For many car owners in China, those prices have become unbearable. It will cost 50 yuan more to fill up the car than before,  many car owners can't help but lament that they can't afford a car.

The good news in the oil industry is that the price of domestic oil products is expected to return to six times the previous level as international oil prices continue to fall. International oil prices fell as crude oil fell on the New York Exchange. For domestic car owners, the drop in crude oil prices also means that domestic refined oil products will be affected, people's travel costs will be reduced, household consumption will be reduced,  many families will benefit.

Related ministries will also adjust the price of domestic finished goods according to the drop in international oil prices. Considering the downward trend of international oil prices, it is highly likely that domestic oil prices will continue to fall. Many car owners are satisfied with the lower oil price,  it would be even better if they could return to the price of 6 yuan. But now to the oil price reduction, most of the car owners have been looking forward to it.

Experts say it is  impossible for domestic oil prices to fall to the six-won range. At present, the international community as a whole is still affected by the COVID-19 pandemic,  the economic situation in many countries is  optimistic. Global demand for oil has  increased because of declining demand for crude  affected countries, leaving many oil states in a more passive position.

A number of oil countries have recently signed a series of agreements to increase oil production in order to increase the amount of oil that can be extracted  increase global oil supply. Due to the increase in production  the decline in global oil demand, oil supply will exceed demand,  the overall downward trend of oil prices is becoming increasingly obvious,  global oil prices will also face a sustained decline.

At the same time, the U.S. can see that it wants to curb the upward trend in finished oil prices by putting pressure on oil-producing countries to pump more oil. Because many oil states are suffering  disease outbreaks  outbreaks, they are  planning to expand their oil production. As a result, international oil production has  recovered as previously.

According to the analysis of the situation of the international oil market, the main reason for the current drop of oil price in the international oil market is the imbalance of oil supply  demand in the global scope. As international oil prices have skyrocketed, many oil producing countries have plans to increase production, leading to the expiration of the previous agreement to reduce oil production. Next, it is likely that some oil-producing countries will increase oil production  supply.

The huge influx of crude oil into the international market will have a certain impact on international oil prices. Since 2020, countries have been affected to varying degrees by the pandemic,  domestic demand for oil has  increased  even decreased. In this international situation, the gap between oil supply  demand will continue to widen, eventually leading to a sustained decline in international oil prices.

Another important factor affecting international oil prices is the trend of the US dollar. As international oil prices are denominated in dollars, the dollar's recent strength is expected to weaken oil prices, leading to a decline in international oil prices. Oil futures, like other futures, are subject to price swings as the dollar rises.

For domestic consumers, the most important thing is how the domestic oil price will move in the future. Most car owners' travel expenses are closely related to the fluctuation of oil prices,  the domestic oil price situation also affects the hearts of many consumers. At present, domestic consumers have high expectations for the downward trend of domestic oil prices,  are concerned that the downward trend of oil prices is only a short-term behavior. In the short term, whether the sharp rise, but also depends on the international oil market situation.

At present, the balance of supply  demand in the international oil market has become an important factor affecting the rise  fall of oil prices. Now it seems that domestic oil prices have a downward trend has become a foregone conclusion, oil price 6 yuan of the moment is also likely to come.

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Source: International Petroleum Network