2023 has come to the end of the year, looking back this year, the international crude oil market in OPEC+ production cuts and geopolitical disturbances can be described as unpredictable, ups and downs.

1. Analysis of international crude oil market price trend in 2023

This year, the international crude oil (Brent futures) as a whole showed a downward trend, but the price center of gravity has shifted significantly. As of October 31, the average price of 2023 Brent crude oil futures was 82.66 US dollars/barrel, down 16.58% from the average price last year. The trend of international crude oil prices this year shows the characteristics of “the center of gravity has moved down, the former low and then high”, and various economic pressures such as the banking crisis in Europe and the United States have emerged under the background of the interest rate hike in the first half of the year, resulting in lower oil prices, down as much as 16%. After entering the second half of the year, thanks to the support of many oil producing countries such as OPEC+ production cuts, the fundamentals began to highlight, OPEC+ cumulative production cuts exceeded 2.6 million barrels/day, equivalent to 2.7% of global crude oil production, driving oil prices to a rise of about 20%, Brent crude oil futures once again returned to a high range above $80 / barrel.

The 2023 Brent range is $71.84- $96.55 / BBL, with the highest point occurring on September 27 and the lowest on June 12. $70- $90 per barrel is the mainstream operating range for Brent crude oil futures in 2023. As of October 31, WTI and Brent crude oil futures fell by $12.66 / barrel and $9.14 / barrel respectively from the year’s high.

After entering October, due to the outbreak of the Palestinian-Israeli conflict, international crude oil prices rose significantly under the geopolitical risk premium, but with the conflict not affecting the output of major oil producing countries, supply risks weakened, and OPEC and the United States increased crude oil production, oil prices fell immediately. Specifically, the conflict broke out on October 7, and as of October 19, Brent crude oil futures rose by $4.23 / barrel. As of October 31, Brent crude oil futures were $87.41 / barrel, down $4.97 / barrel from October 19, erasing all gains since the Israeli-Palestinian conflict.

 Ii. Analysis of the main influencing factors of the international crude oil market in 2023

In 2023, both macroeconomic and geopolitical influences on crude oil prices have increased. The impact of macroeconomic on crude oil is mainly concentrated on the demand side. In March this year, the banking crisis in Europe and the United States exploded, the hawkish remarks of the Federal Reserve were introduced intensively in April, the risk of the debt ceiling in the United States was put under pressure in May, and the high interest rate environment caused by the interest rate hike in June weighed on the economy, and the weakness and bearish sentiment at the economic level directly suppressed the international oil price from March to June. It has also become the core negative factor that international oil prices cannot rise in the first half of the year. In geopolitical terms, the outbreak of the Israeli-Palestinian conflict on October 7, the geopolitical risk again intensified, and the international oil price returned to a high near $90 / barrel under the support of this, but with the market re-examine the real impact of this event, the concern about supply risks subsided, and crude oil prices fell.

At present, in terms of the main influencing factors, it can be summarized as the following aspects: whether the Israeli-Palestinian conflict will affect the output of major oil producers, the extension of OPEC+ production cuts to the end of the year, the relaxation of sanctions against Venezuela by the United States, the rise of US crude oil production to the highest point in the year, the progress of inflation in Europe and the United States, the actual performance of Asian demand, the increase in Iranian production and the change in trader sentiment.

What is the logic behind the volatility of the international crude oil market in 2023? Under the geopolitical disturbance, what is the direction of the crude oil market next? On November 3, 15:00-15:45, Longzhong Information will launch a live broadcast of the annual market in 2023, which will give you a detailed interpretation of the oil price, macroeconomic hot spots, supply and demand fundamentals and future oil price forecasts, predict the market situation in 2024 in advance, and help navigate the corporate planning!