High oil prices make the world economy worse

International oil prices have risen rapidly in recent days. Both New York and London have hit a new high of nine months, approaching the level of turmoil in Libya during the first half of last year. As the current global financial crisis and the European debt crisis are still severe, the continued rise in oil prices is aggravating the world economic recovery.

The current global economic and political situation is undergoing profound changes. The aftermath of the financial crisis and the economic crisis continues to spread. The global economy, though experiencing a recession, has experienced a lack of recovery; and as the debt crisis in Europe and the United States deepens, the global economy has experienced another recession. The risk is increasing.

Global crude oil demand will continue to grow In 2012, the global economy, especially the European economy, will remain in a difficult and slow recovery process. This year, the European economy is beginning to be difficult and the positive factors are not clear. The liquidity difficulties and credit crunch of European banks are difficult to improve. Multinational sovereign credit ratings have been downgraded by the three major US rating agencies. European countries are still unable to form a consensus on how to deal with the sovereign debt crisis. The possibility of further proliferation and upgrading of the European debt crisis is high, which has also become a major obstacle to the global economic recovery in 2012. . The international crude oil market is facing a huge risk of instability.

The U.S. uses low interest rate policies to boost the U.S. economy, and the Fed said it will keep low interest rates until the end of 2014, which will give a boost to the fragile U.S. economic recovery and stimulate its economic development. The Fed may launch a new round of large-scale economic stimulus plan in 2012 to promote the U.S. economic recovery. It is estimated that the 2012 US economic growth rate will be 2.2%. Affected by this, according to a report released by EIA on January 10th, the average daily oil consumption in the United States in 2012 was 18.96 million barrels, an increase of 90,000 barrels over 2011, an increase of 0.5%.

Japan is the third largest oil consumer in the world. As domestic economic growth is slow and people are increasingly favoring energy-saving vehicles, the amount of diesel used in most of Japan’s oil demand is constantly decreasing. Although post-disaster reconstruction means that oil demand will increase in the coming months, it is expected that Japan’s oil demand will likely show a major downward trend in 2012.

Although the economic growth rate of emerging economies tends to slow down, it will still be the main force driving the growth of global crude oil demand. The Central Economic Work Conference held in December 2011 adjusted the development of China’s economy in 2012 to “stabilizing and progressing” and will continue to implement a proactive fiscal policy and a prudent monetary policy so as to maintain a moderate economic growth in China in 2012. speed. According to the latest EIA forecast, China's average daily oil demand in 2012 will increase by 5.4% from 2011. In 2012, economic growth in China and India will increase oil demand. Therefore, despite the negative spillover effects of the US-European debt crisis, the economic growth rate of emerging economies in 2012 tends to slow down and bear increasing risks, but it will still lead the global economy and play an important role in the growth of international crude oil demand.

In 2012, global crude oil demand will continue to grow under the influence of developing country demand, but it is subject to the globally gloomy economic situation and the expected growth is limited; global crude oil demand is expected to reach 90.3 million barrels/day in 2012, compared with 2011. Annual growth of 1.3 million barrels / day. On the supply side, OPEC reached an agreement on the daily output limit of 30 million barrels of oil at the ministerial meeting on December 14, 2011. The current increase in output ceiling aims to increase global oil supply, balance global inventories as soon as possible, and curb oil prices.

Uncertainties exacerbate the oil price surge In the new situation of the Iranian oil embargo imposed by the United States and Europe, Saudi Arabia is expected to expand its oil exports. Saudi Oil Minister Naimi said that Saudi crude oil production capacity is 12.5 million barrels / day, exports maintained at 9 million - 10 million barrels / day, Saudi Arabia is ready to make up for any supply gap in the crude oil market. In view of this, it is expected that the global crude oil supply in 2012 will be relatively adequate, and supply and demand will be basically balanced. However, the turbulent situation in the Middle East has created huge uncertainties in the global crude oil supply. If the turbulent situation in Iran, Syria, or other Middle Eastern countries continues to escalate and affect its oil production and exports, global oil supply will face new uncertainties and market panic. Emotions will inevitably push up international oil prices.

In early 2012, western countries formulated a contingency plan to deal with the possible shortage of international crude oil in the event of the Iranian ** Hormuz Strait. The plan is planned to take place in the United States and Japan within one month after the appearance of special circumstances. In the European Union and other oil reserve countries, 14 million barrels of oil and its products are released daily. Judging from the current situation, Iran and Europe and the United States tit for tat, the situation seems to be gradually moving towards the worst possible. If Iranian war breaks out, even if 14 million barrels/day of oil reserves are released, international oil prices will inevitably rise substantially.

The biggest uncertainties in the current international crude oil market are the European debt crisis and the Iranian issue. As the recovery of the European debt crisis is not yet clear, the geopolitical situation in Iran and other oil producing regions in the Middle East is in full swing. Therefore, if the European debt crisis triggers a second recession, international oil prices will once again find a bottom; Iran is the second largest oil producer of the Organization of Petroleum Exporting Countries (OPEC), with an average daily production of 3.5 million barrels of oil and exports of 2.6 million barrels. 20% exported to EU countries. If Iranian war breaks out, with its important position in the international oil market, international oil prices may impact the historical high of US$147/barrel in 2008. As long as the situation in Iran is controllable, the international oil price in the first quarter of 2012 will maintain a small fluctuation of around 120 US dollars.

After February 19, 2012, Iran announced that it stopped supplying fuel to Britain and France, the ** settlement price of Brent North Sea crude oil delivered in April 2012 rose to US$121.1 a barrel for 20 months. new highs. As the international situation continues to oscillate upward, oil prices will have a negative impact on the recovery of the world economy. The proved oil reserves in the Gulf region are about 650 billion barrels, accounting for 70% of the world's total reserves. The total amount of oil exports in the region accounts for 60% of the world's total exports. Changes in the Gulf situation will continue to exert an important influence on international oil prices. In fact, a price rise of 15 U.S. dollars per barrel within one year will probably reduce the world economic growth rate by 1 percentage point. As the current global financial crisis and the European debt crisis are still severe, the continued rise in oil prices is aggravating the world economic recovery.