What are the factors that affect the fluctuation of crude oil price?

According to my experience in spot market investment analysis and guidance, there are many factors that affect the spot crude oil price, which are mainly divided into the following points:

(A) the impact of demand on crude oil prices

1. The influence of economic growth on crude oil prices

The global economic growth will affect the oil price by changing the demand of the oil market, and there is a strong positive correlation between economic growth and oil demand growth. However, the change of economic growth rate can not only explain the rise of oil prices in the medium and long term, but also the decline of oil prices caused by short-term economic recession can be reflected in the changes of economic data.

2. The influence of weather on the price of crude oil

Climate will affect the supply and demand of crude oil. For example, abnormal weather may damage oil production facilities, lead to supply interruption, and then affect the international oil price, but its impact on the entire international oil price is short-term. In addition, many countries in Europe and America use oil as heating fuel, so when the climate changes abnormally, it will cause short-term changes in fuel oil demand, thus driving the price changes of crude oil and other petroleum products.

Influence of supply on crude oil price

1. Influence of crude oil price change on output

OPEC and non-OPEC countries have different supply principles for oil prices, and the relationship between output and price is active and passive. The Organization of Petroleum Exporting Countries has the vast majority of proven crude oil reserves in the world, and its production and price policies have great influence on the world crude oil supply and price. The usual method is to curb oil prices by increasing production.

2. The influence of geopolitics on crude oil prices

Unexpected events and climatic conditions make oil price fluctuations more uncertain. In addition to the general commodity attributes, oil also has the attributes of strategic materials, and its price and supply are greatly influenced by political forces and situations. In recent years, with the development of political multipolarization, economic globalization and production internationalization, competing for oil resources and controlling the oil market have become important reasons for the oil market turmoil and soaring oil prices. The tense geopolitics has strengthened the expectation of supply contraction in the international oil market. Geopolitical factors such as terrorist attacks on oil facilities, strikes by oil workers and political turmoil in oil-producing countries will all have an impact on international oil prices.

(c) Correlation between inventories and crude oil

Crude oil inventory (EIA data every Wednesday) is divided into strategic crude oil inventory and commercial crude oil inventory. Strategic crude oil inventory is an oil inventory reserved by the state for strategic consideration and prevention of oil shortage. This is because crude oil has the attribute of strategic materials, and its price and supply are greatly influenced by political forces and the situation. In addition to strategic attributes, crude oil also has its commercial attributes. In terms of commercial attributes, we need to pay attention to the commercial crude oil inventory, which is higher than the safety obligation inventory. Power comes from economic demand, so it is closely related to price.

Influence of financial market on crude oil price

1, change of speculative position and NYMEX crude oil price

At present, in the international oil futures market, the operation of international speculative capital is a factor that cannot be ignored. Speculation and market expectation in the crude oil market often increase the fluctuation of crude oil prices. The influence of speculative factors in the international crude oil market on crude oil prices is 10%-20%. Especially when some unexpected events happen, a large amount of speculative capital operates in the international crude oil futures market, which intensifies the turmoil of international oil prices.

2. Reference of related commodities to crude oil price judgment

As we all know, the overall trend of commodities is inversely proportional to the trend of the US dollar. There are two main reasons. On the one hand, commodities are denominated in dollars, and with the appreciation of the dollar, the relative prices of commodities naturally decline; On the other hand, the appreciation of the dollar often represents the rise of risk aversion, thus reducing the demand for risky assets such as commodities, and then lowering the price of commodities. As one of the hot commodities, the price of crude oil will also be affected by the trend of the US dollar index, which shows a negative correlation with it.