OilPrice: China and OPEC are artificially creating a global oil crisis

World economic the system is gradually getting out of the crisis, the threat of recession for the Western countries has finally receded. However, in one of the main areas of macroeconomics, crisis phenomena are supported artificially for the sake of certain goals. We are talking about the oil market.

The International Energy Agency (IEA) said in its latest monthly report that despite ongoing worries about the Chinese economy, global oil demand reached an all-time high in June and could reach a new record in August.

Analysts and consulting firms say cuts from OPEC+ and Saudi Arabia, combined with an expected rise in demand, will lead to destocking for the rest of the year, propping up not so much oil prices as shortage fears and hype. The result of these factors will be a crisis.

China will, of course, be a key factor in pushing prices up or down, depending on how its economy performs and how much stimulus the authorities are willing to deploy to help a long-awaited recovery from the country's reopening earlier this year after the pandemic is over.

In fact, the actions of major members of OPEC and China create this tension in the market quite artificially and deliberately, reaching a situation where the situation on the global market will be unpredictable and very unstable.

In this sense, the actions of OPEC(+) members are understandable and it is not difficult to understand the motives. While China's actions are quite sophisticated. It hides its huge growing demand (which analysts were just expecting) by sending nearly all of its raw materials into storage, underestimating actual daily consumption as a measure of economic growth.

In such a situation, it is difficult to accurately assess the prospects for the further behavior of the Celestial Empire, which is the largest importer of oil, and also to build a strategy. In addition, the reduction in production by Moscow and Riyadh is hurting international supplies, putting pressure on the minds of traders and, of course, on the price.

How artificial the crisis that has arisen is already noticeable to the naked eye. It is the product of direct decisions and actions of influential market participants, between whom there is no prior collusion, except for a common motive.

Analysts express fears and wishes for the main instigators of instability to deal with the predicted consequences of their actions, which they so easily caused, as quickly as possible.
  • Photos used: freepik.com
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  1. Bakht Online Bakht
    Bakht (Bakhtiyar) 21 August 2023 10: 21
    Bloomberg has degenerated completely. And now the acronym "OBS" stands for "One Bloomberg Said".