Oil Fell Below $100; Citi Says $65/barrel??
On July 5, $Light Crude Oil - main 2208(CLmain)$ was down 8.2%, closing at $99.50 per barrel, also the first time in nearly two months to fall below $100.
1. Rapidly Surging & Plunging Commodity Prices
Market analysis suggests that the commodity prices rose too quickly, mainly due to supply chain tensions, rapid demand growth, disruptions in the logistics industry and falling inventories.
Currently, although there is no significant improvement on the supply side, the prices of commodities have generally fallen due to the weakness on the demand and the pullback of speculative funds.
2. Good News For Inflation & Rate Hike
However, the retreat in commodity prices may be good news for the upcoming CPI data.
Take the May CPI data for example, energy and food contributed half of the CPI increase, and energy contributed 53% to eurozone inflation. The fall in commodities could play a positive role in curbing high inflation.
Market analysis suggests that the Fed may gradually slow down the pace of interest rate hikes in the Q4.
In response to oil prices decrease, $NASDAQ (.IXIC)$ was up 1.75%, $S&P 500 (.SPX)$ edged up 0.16%, $Dow Jones (.DJI)$ fell 0.42% last night.
3. Will crude oil continue to fall in the future?
Andy Lipow, president of Lipow Oil Associates, said:
If a recession does come, it will severely weaken energy demand, leading to more dramatic downside trend in the commodities market.
On Tuesday, Citigroup compared the current energy market to the oil crisis of the 1970s, saying that
without investment and OPEC intervention, the price of crude could fall to $65 a barrel by the end of 2022 and possibly to $45 a barrel by the end of 2023.
However, BlackRock are bullish on oil prices, saying that
commodity prices, including crude oil, will remain "structurally higher" for decades as supply fails to keep up with demand growth. Oil prices will remain high as many countries try to reduce its energy dependence on Russia and investment fails to meet growing energy demand.
Currently, $Light Crude Oil - main 2208(CLmain)$ is at 100.34, and $Brent Last Day Financial - main 2206(BZmain)$ is at $103.53. Some analysts in tiger community also said $90 may be the support level of oil prices.
Are you bullish or bearish on the current oil prices?
Do you think crude oil will fall below $90 or even to $60?
Share your thoughts in the comment section, and win tiger coins~
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车都快生锈了，油钱跌下来才好
Lets see
Only can give a guess... [Thinking]
I guess it may turn back bullish [Doubt]?
Crude oil 🛢 may hit $90 but $60, maybe not for now... Welp, who knows?