The spread of the energy crisis spreads to more countries! U.S. crude oil hits a new seven-year high

On Monday (October 11), U.S. crude oil prices continued to soar and set a new high in the past seven years, while Bulk Oil rose to a three-year high. Because OPEC+ maintained its original pace of production increase, and as the economies of various countries gradually recovered from the new crown epidemic, The demand for fuel continues to grow. At the same time, the European energy crisis has spread to more major economies in the world, triggering more panic buying.


This month the Organization of the Petroleum Exporting Countries (OPEC) and other major oil-producing countries decided that the increase in production would not exceed the previously agreed rate. Since then, oil prices have soared to multi-year highs. However, natural gas prices have soared by more than 300%, reaching the highest level since 2014. After considering the prices of oil and many other commodities, the trend of natural gas has always been the focus of attention.

As the global energy market continues to slump, the price of natural gas has an increasing impact on crude oil, and consumers are looking for cheaper alternative fuels, which drives prices in the oil market to continue to rise. The analysis pointed out that this is a budding but rapidly growing trend that may increase global crude oil demand by 2 million barrels per day in just a few years.

With the spread of the energy crisis, South Korea, Japan and other countries have also set off a natural gas rush, mainly due to the sharp increase in seasonal demand and the continuous increase in European natural gas prices, which has led to panic purchases by buyers from many countries. In addition, according to foreign media reports, India has recently faced a power crisis due to a severe shortage of coal and fuel, and the capital is afraid of power outages. The crisis caused by energy shortages in Europe has spread to many countries around the world, further triggering soaring energy prices.

Marshall Steeves, an energy market analyst at IHS Markit, pointed out that although Russian President Vladimir Putin announced on Wednesday that the Russian gas company Gazprom will increase natural gas exports to Europe, the price of WTI crude oil still rose to a nearly seven-year high. At the same time, it was reported that US officials revealed that the government has no intention of releasing the strategy. Oil reserves. This news caused a sharp correction of oil prices by more than 2% last Wednesday.

James Williams, energy economist at WTRG Economics, said that more broadly, there are three reasons why WTI crude oil prices have reached the highest level since 2014:

The first is OPEC+ to curb oil production. OPEC has been very conservative in increasing production because they are worried that a new wave of epidemic will cause a slowdown.

The second is economic recovery. The U.S. economic recovery is better than the rest of the world, and its oil consumption has now returned to the level before the outbreak.

The third is that U.S. shale oil production growth has not returned to the level of 2019, because investment in new oil wells has slowed down. The shareholders of exploration and production hope to obtain a more direct return on investment.

John Kilduff, a partner at Again Capital in New York, said: "The fundamental background is tight supply, which will continue to push oil prices up steadily."

(U.S. crude oil daily chart)

At 11:49 GMT+8, U.S. crude oil was quoted at US$80.84 per barrel.