Chapter 1862 Crude Oil Situation
The weather is getting colder and colder. Many areas in the north have been covered with snow. However, although there have been two snowflakes in the capital, they are basically gone when the wind blows.
Feng Yu just got off the plane, the driver came to pick him up at the airport. After Xiangjiang is done, Feng Yu can go home and rest for a few days.
Feng Yu no longer needs to keep an eye on crude oil futures. Things are exactly as he thought, and the price of crude oil keeps falling.
The financial crisis broke out completely, and the price of crude oil futures also fell sharply. Those who thought that the stock market fell, and the crude oil price would rebound, all suffered a lot.
There are also those who invest in gold futures with high leverage, all of them may not be able to cry, and they have already shed their tears.
They never imagined that the impact of this financial crisis would be so great that the entire financial industry would fall across the board. Stocks, futures, funds, currencies, etc. are all plummeting, and no major global market is immune.
The reason for the sharp drop in crude oil futures was not only caused by Feng Yu and the others, but also by the participation of many large conglomerates in Europe and America.
These large consortiums also suffered a lot in this financial crisis. Which consortium may not have a financial company under its umbrella?
These big consortiums have lost money, what will they choose, of course they will choose to earn back their losses.
As long as they can unite, they can manipulate the market to a certain extent, and then earn back the losses through other products, such as futures that can use high leverage.
When the price of crude oil falls below 100 US dollars, OPEC members feel that it is about the same, between 80 and 100 US dollars, this is their psychological price, it is in their best interest, and it can also let the United States, China, etc. Big oil importers are satisfied.
But what they didn't expect was that the financial crisis hit and the price of crude oil began to plummet. At this time, OPEC members panicked. What's going on? How did crude oil become so cheap?
Many of their countries still owe a lot of foreign debt, and they urgently need to sell oil to pay off the debt, otherwise the interest will roll up, and a lot of crude oil will be extracted.
The price of crude oil has fallen, and debts could be paid off with one million barrels before, but now it takes almost two million barrels. No way, in order to pay off the debt, let's mine more.
In this way, a vicious circle is formed, with high production and oversupply, and according to market rules, the price of crude oil itself will fall.
When the price of crude oil falls, they will increase production, which will cause the price to fall, and they will fall into an endless loop. Unless they can pay off their debts, they can bring back the price of crude oil through a plan to limit production.
Don't think that those OPEC members are really very rich. Except for war-torn countries like Iraq and Iran, even countries like the United Arab Emirates owe a lot of foreign debts.
In the Middle East, many people don’t understand economics at all. Over the years, they have mainly joined forces to sell oil, natural gas, etc. to make money, and occasionally sell some chemical products.
And when the price of crude oil is good, they can make a lot of money one by one, and each of them has become eye-catching. He made various promises to the domestic people, and even borrowed money to fulfill the promises.
For example, to prosper the domestic tourism industry, it is necessary to build some world-class hotels. One building is certainly not enough, more must be built. Three and five are not too few, ten and eight are not too many, if you have no money, you can borrow money to build them.
Not to mention that the tourism industry itself is a long-term investment. No tourism can recover the cost and make a profit in a short time. Tourists are not stupid.
Then tourism must build a luxury hotel? Others mainly come here for fun. Beaches, sea water and even deserts are all attractions. Are hotels considered attractions?
They see many hotels in Las Vegas and other cities, making a lot of money, so they have to imitate them, and not only five-star hotels, but many of them are above five-star hotels.
But Las Vegas and other cities are gambling cities, where many people win money, so naturally they want to enjoy it a lot, and don't feel bad about spending money.
But there are also many ordinary tourists who come to the UAE for tourism.
Where are they willing to go? Which rich person would think that a hotel is better than a home, and when traveling, he would stay in a hotel instead of looking at the scenery?
Moreover, the UAE has not undergone special publicity before. Where can there be so many tourists? The higher the vacancy rate of hotel rooms, then they have to increase the price of hotel accommodation to make up for the loss. As a result, this is a vicious circle again.
Why is your hotel so expensive? An ordinary suite can catch up with other people's presidential suite.
There are also the United Arab Emirates and others who have to learn from Saudi Arabia, build large cities, and invest heavily in infrastructure, but these are not profitable.
It is a good thing for the people to invest in infrastructure, but it cannot be done with debt. The debt will increase, which is dangerous for a country like the UAE, which has almost no foreign exchange reserves.
In order to avoid repayment of debts, the UAE was the first to sharply increase production, and then other member states began to follow suit. When Feng Yu saw this, he couldn't help but smile from ear to ear.
There are mountains of gold and silver in the family, and they can't bear to have two prodigal children.
If OPEC members can truly unite and keep the economy, currency and even some laws consistent like the EU, then OPEC is definitely a powerful organization.
It is a pity that this organization is too loose, and countries continue to come and go, so it is completely impossible to form a force.
Crude oil fell, they didn't know how to find the reason or the solution, but blindly increased production. Isn't this digging a hole for themselves?
Selling so much crude oil every year, I don’t know how to keep some foreign exchange reserves. When someone manipulates the price of crude oil, they don’t even have the power to resist. What a failure.
As the boss, Saudi Arabia did not make a move. Perhaps this is also a strategy of Saudi Arabia.
Other countries are not convinced. When encountering a crisis, I, Saudi Arabia, can easily survive. Our foreign exchange reserves are sufficient, and there are not many places where our country needs to spend money. The construction that needs to be built has been completed.
In the future, let’s see if any of you will disagree with me. When I say that production is limited, production should be limited. When I say that production must be increased, production can be increased. If you mess around like this at will, you will be the ones who suffer!
Regardless of whether these speculations are true or not, crude oil prices have continued to fall and have fallen below the $60 line, which surprised many people.
The benchmark line of $60 is considered by many people to be an insurance price, but they never imagined that the $60 line would be easily broken, and then continue to go all the way down.
Could it be that this crude oil can still fall to what it was in the last century, only a dozen dollars a barrel?
This is of course impossible, because Feng Yu and the others have already started to gradually deliver the contracts, and those big consortiums in Europe and the United States are also slowly delivering the contracts and starting to reap profits.
It's just that crude oil futures fluctuated more violently in this life than in the previous life. Feng Yu even suspected that the price of crude oil might drop to 30 dollars.
If inflation is counted, it is lower than the dozen dollars in the last century!
It seems that this time, the profit can be higher than imagined.
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