What Is the "Great Diving" of International Oil Prices?

With the epidemic spreading globally, where does the world economy go? Drill Collar supplier shares with you.

As an important economic indicator, international oil prices have emerged from the downward trend of shocks since the beginning of this year. Last week, the price of light crude oil futures (WTI) delivered on the New York Mercantile Exchange in May experienced a historic plunge, falling to a negative value for the first time, triggering market panic. Why has international oil prices plummeted? What impact will it have on the world economic recovery?

What is the recent oil price trend?

In 2018, the average price of international oil prices was approximately US $ 65 per barrel. In 2019, due to the overall oversupply and the suppression of the upward trend in international oil prices, there was almost no breakthrough of US $ 65 per barrel throughout the year. Investors had hoped that international oil prices would rebound strongly in 2020. However, multiple factors superimposed the outbreak of the new crown epidemic, which caused international oil prices to fluctuate violently.

The first four months of this year can be divided into four stages of the trend of international oil prices. Oil prices have declined overall, but for different reasons. In January, in response to the increase in the end of last year and the international oil price correction, the average WTI price fell from the US $ 60 per barrel at the beginning of the month to the US $ 50 per barrel at the end of the month. In February, the new crown epidemic broke out and investors expected market demand to decrease, and the average WTI price dropped from the US $ 51 to the US $ 44 per barrel.

In March, the average price of WTI plunged to the level of US $ 20 per barrel due to the breakdown of negotiations between the Organization of Petroleum Exporting Countries (OPEC) and the Russian production reduction agreement and the increase in production capacity. In April, due to the impact of the epidemic on supply and demand and the lack of global inventory space, WTI experienced a “negative oil price”.

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