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Nymex Crude Oil Futures See Biggest Gain Ever
According to an article published in the New York Times on June 6, oil prices surged on Friday, with crude oil futures rising by US$11 per barrel, and oil prices soaring to US$138 per barrel. The U.S. dollar fell sharply against the euro again and a senior Israeli official once again hinted at the possibility of a raid on Iran, leading to an unprecedented surge in oil prices.Oil prices have doubled in the past 12 months and are up 42% this year. On that day, crude oil futures on the New York Mercantile Exchange rose by $10.75, or 8%, to $138.54, which was the largest single-day increase since trading began in 1983. "The current market is going to shoot itself in the foot," said Adam Robinson, an energy analyst at Lehman Brothers. "The market is looking for a price that allows it to build a safety net within the system - either inventory or spare capacity. It will take time, but the market has become extremely uneasy and doesn’t want to wait any longer.”
Amidst the fear of recession, various gloomy economic news are emerging one after another. In this environment, the US dollar against the euro once again fell below 1 US dollar, which directly led to the recent sharp rise in oil prices. In May, the U.S. unemployment rate also rose sharply to 5.5%, the largest increase in more than 20 years.
A lot of negative news on Friday directly caused the initial sentiment that the Wall Street financial system was improving to disappear without a trace, and the stock market immediately fell sharply. As financial stocks fell sharply, the Dow Jones Industrial Average fell 394.64 points to close at 122.9 points, a decrease of 3%. The broader S&P 500 also fell 3%, its biggest drop since February.
in recent weeks. Huge swings in energy markets continue to confuse traders. Despite ample market supply and strong evidence of reduced consumption in major industrialized countries, prices have continued to rise. Investors are in high spirits. They are focusing on the supply risks of crude oil futures in emerging market countries and the demand for crude oil in these countries, where fuel prices are subsidized.
At a time when uncertainty has transcended the foundations of energy markets, geopolitical tensions in the Middle East have returned to the center of attention. Israeli Deputy Prime Minister and Transport Minister Shaul Mofaz said on Friday that an attack on Iran's nuclear facilities appears "inevitable" if Iran does not halt its nuclear program. Iran is OPEC's second-largest oil producer, exporting about 2 million barrels of crude oil per day. But with little spare supply left in the world, oil prices may be pushed even higher once Iranian exports are cut off. Currently, global spare production capacity is approximately 3 million barrels per issue, and daily oil consumption is 86 million barrels.
Antione Halff, an analyst at energy brokerage Newedge, said that "the re-emergence of the Iran risk differential requires a careful assessment of the possible impact of a possible military strike on oil supplies. Mofaz's comments make it clear that the Iranian nuclear issue remains unresolved." solution, and the risk of military conflict is actually increasing."
Investors also reacted to a forecast from a major Wall Street bank that oil prices could continue to rise. Morgan Stanley predicts oil prices will rise to $150 a barrel next month due to rising demand from Asian countries. The strike by Chevron oil workers in Nigeria has also raised concerns that local oil production may be forced to stop. In April, Exxon-Mobil Oil Company also suffered a strike that lasted for nearly a week, resulting in a reduction of 800,000 barrels of oil exports per day in Nigeria, which is a reduction of 1/3 of the country's daily oil exports. The strike may also lead to delays in Chevron's Agbami project, Nigeria's largest offshore venture with a planned output of 250,000 barrels per day.
There is currently a view that the current commodity market is forming an investment bubble, somewhat similar to the real estate and technology bubbles of the 1990s. This view is held by politicians in Washington and OPEC oil producers. Oil-producing countries believe that speculators have led to the current rise in oil prices, and the current oil market has shown the characteristics of some kind of bubble.
However, many analysts believe that it is not speculation that has pushed up oil prices, but that the current price increase is fundamental. "I don't know what people are saying, but this is not a bubble, this is reality," said Jan Stuart, global oil economist at UBS. "There are a bunch of commercial buyers waiting there, running around ready to buy because they are scared. You If you are an airline, you must be frightened now. I don’t think anyone will buy at such a high price unless you need it.” Last month, Jeffry Harries, chief economist of the Commodity Trade Commission, also believed that there is no speculation at present. Foam. Instead, he believes that a combination of forces has led to the current rise in oil prices, including a weak U.S. dollar, strong demand from emerging market countries and domestic political tensions in some oil-producing countries.
