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The Rising Price Of Oil And Geotrst
May 30, 2018

What is the magnitude of this price adjustment?

According to Zhuo Chuang Information, on May 23, the reference crude oil change rate was 5.21%, corresponding to the increase of 249 yuan/ton for gasoline and diesel. In addition, according to Longzhong Information, gasoline and diesel are increased by approximately 260 yuan/ton.This year, domestic oil prices have been raised six times. Up to now, gasoline has been increased by 460 yuan/ton, and diesel has been increased by 450 yuan/ton. Among them, the biggest increase was on April 26, gasoline rose 255 yuan / ton, diesel rose 245 yuan / ton.

Why is it expected that there will be a larger increase in oil prices?

According to the “Petroleum Prices Management Measures,” the highest retail prices of domestic gasoline and diesel are linked to international oil prices. Since the pricing cycle, international oil prices have maintained a strong performance and are in an upward trend.

On May 17, 2018, Brent crude oil futures broke through $80/barrel, setting a new high since November 2014. Recently, the U.S. WTI crude oil futures also broke the 70-kilogram mark and set a new high in three-and-a-half years. Related reading: crude oil technical analysis: good to do it! oil prices fell below 71 US dollars mark.Analyst Tan Yi of East Asian Securities believes that due to a variety of reasons that led to the rise in oil prices, the United States announced its withdrawal from Iran’s nuclear agreement and the situation in the Middle East was tense. The market feared that crude oil supply would cause prices to rise. Recently, the United States or further sanctions on the Venezuela oil industry, which will lead to continued decline in crude oil production, thereby supporting the oil price.

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How is the future of oil prices?

Several agencies such as the US Energy Information Agency (EIA) raised their expectations for oil prices in 2018.The US Energy Information Administration's “Short-Term Energy Outlook” report released in May pointed out that the average price of Brent crude oil in 2018 is forecast to reach US$71/barrel, which is an increase of US$7/barrel from the previous month’s forecast.“Currently, the favorable factors in the international crude oil market still dominate, and the overall outlook is relatively optimistic, but Brent crude will have some resistance when approaching the 80 US dollar mark,” said Li Yan, an analyst at Longzhong Information.

According to the report of Changjiang Securities, there is a global economic recovery as a support, superimposed geopolitical factors, the international oil price will follow up.


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