On November 18, oil analyst Nick Cunningham wrote an article saying that the worst moment for oil prices is over. The global economy will avoid recession in 2020, which provides some room for oil prices to rise. A series of recent economic data have dispelled market concerns about economic recession, but it should be noted that it is still difficult to achieve a comprehensive breakthrough in international trade issues.
Last week, the International Energy Agency ( The IEA warned that the “huge supply buffer” built up in the first half of 2020 will cause problems for OPEC+ as it tries to balance the oil market. Another potential oversupply is partly due to a sharp decline in oil demand growth this year, forcing forecasters to cut their forecasts multiple times.
Bank of America Merrill Lynch said in a report: “In 2019, global oil demand increased by only 830,000 barrels per day year-on-year, setting a record high since the global financial crisis 10 years ago. Minimum speed.”
The economic slowdown is particularly concentrated in the industrial sector, which has been hit hard by international trade tensions. Bank of America Merrill Lynch said: “The manufacturing recession in 2019 was so pronounced that we believe it is likely to be labeled the third global industrial recession in the past decade, following the decline in economic activity in 2012 and 2016.”
Bank of America Merrill Lynch concluded, or more succinctly, that the world has just experienced an industrial recession. Because of the massive supply glut in 2019, oil prices were barely able to remain stable.
In fact, industrial slowdown is spreading around the world. Taking India as an example, JBC Energy said in a report on November 18 that weakness in the “manufacturing and industrial” sectors of the Indian economy continues, which has had an impact on diesel sales. Activity in India’s manufacturing and construction sectors appears to be weakening as bitumen sales are also low.
However, the situation can also be reversed. While many are pinning their hopes on an easing of international trade tensions, a series of recent economic data have dispelled worries about an economic recession.
Bank of America Merrill Lynch said: “Looking ahead to 2020, with manufacturing PMI data appearing to stabilize and in some cases even turning to the optimistic side, we look forward to oil cycle demand The situation can improve.”
At the same time, Bank of America Merrill Lynch said that if international trade tensions can really improve substantially, this will further Helping drive industrial activity and confidence in the global economy. Additionally, any signs of improvement on trade could add upward pressure on cyclical energy and metals prices, and the removal of some tariffs could either depress the dollar or push commodity prices higher.
However, oil analyst Nick Cunningham warned that despite this, it is still extremely difficult to achieve a comprehensive breakthrough on trade issues and tensions are not over yet. In fact, market doubts surfaced again on November 19. Reports say that U.S. President Trump is unwilling to lower tariffs, but when he faces an impeachment investigation, his approval rating may continue to deteriorate, thus affecting the future international trade situation.
Chemical fiber raw materials in the textile industry are downstream products of petroleum. If the oil market improves, it will definitely be a big benefit to the chemical fiber textile industry.
At present, the biggest negative factor in the crude oil market – the problem of oversupply has not changed substantially. The world’s major oil-producing countries still have no intention of compromising and continue to rely on their respective advantages to protect existing market interests. The Middle East and Russia are increasing production, and the United States is considering further relaxing crude oil export controls. The second major negative factor is the strength of the US dollar.
Based on the above two factors, if crude oil continues to fall, the “tragedy” of 2008 will be repeated. The fall in international oil prices will affect the polyester market, and the market price of polyester filament may continue to hit new lows. Of course, we must also see positive factors. The current polyester filament market has fallen to its lowest point in recent years, and relatively low prices are forming a strong attraction. At present, some experts are optimistic about the economic situation next year and believe that the crude oil market has a certain room for growth. If so, the chemical fiber and textile industry may suffer all the hardships! </p
