Domestic Crude Oil News in Brief Analysis

Recently, international crude oil prices closed higher.

The U.S. WTI crude oil futures main contract settled at $85.60 per barrel, up $2.29 or 2.8%, and the Brent crude oil futures main contract settled at $88.20 per barrel, up $1.93 or 2.2%.

Tuesday oil prices rebounded strongly, WTI rose significantly, nearly 3%, mainly due to supply-side risks to oil prices to bring a boost, the main influencing factors: the situation in Ukraine and Russia tensions, overlaid with the UAE previously suffered an attack, the current risk is still not lifted, the Organization of the Petroleum Exporting Countries OPEC production increase difficulties.

Will international oil prices break $100?

The recent spike in oil prices is largely due to supply risks from geopolitics, which has made it difficult to boost supply from the Organization of the Petroleum Exporting Countries (OPEC).

The last time international oil prices reached $100 was in 2014, during a crisis in Ukraine. At the time, Ukraine's pro-Russian President Yanukovych refused to sign a political and free trade agreement with the EU, triggering a political crisis in his country, and ultimately Russia was unsuccessful in preventing Ukraine from falling to the EU and NATO.

The U.S., which is standing in solidarity with Ukraine across the ocean, has so far not dared to easily impose more sanctions on Russia. Although the U.S. does not directly depend on oil produced in Russia, inflation from the overall rise in international oil prices will overwhelm the country - the level of inflation in the U.S. has reached its highest level in 39 years. For U.S. President Joe Biden, inflation is not only an economic issue, but a political one.

"If geopolitical tensions continue to heat up, Brent crude may not need much of a push to reach $100 a barrel."

Also pushing up oil prices in 2022 is the issue of supply chain disruptions due to the epidemic. The Omicron mutant strain has once again caused a massive rebound in the outbreak, throwing cold water on multiple governments in real life.

Goldman Sachs' head of energy research, Kulwarin, noted that "global energy demand was already at an all-time high before the emergence of Omicron, and with air travel recovering, albeit slowly, but with countries like Australia, New Zealand and Singapore recently being very aggressive in easing flight restrictions, we will see another record high in energy demand in 2022 and 2023."

Domestic Crude Oil News in Brief

Recently, the day session crude oil futures contract on the Shanghai International Energy Exchange (SIEC) oscillated to the upside with active transactions and reduced positions. The main domestic crude oil futures contract 2203 opened at 530.7 yuan and closed at 539.1 yuan, up 1.74% or 9.2 yuan, as of day end; settlement price was 533.6 yuan; volume was 151,929 lots; positions were 36,250 lots, with daily positions decreasing by 9,137 lots.

As of January 25 close, the New York Mercantile Exchange March delivery of light crude oil futures prices rose $2.29 to close at $85.60 per barrel, or 2.75%; March delivery of London Brent crude oil futures prices rose $1.93 to close at $88.20 per barrel, or 2.24%.