First, the history of minimal international oil prices
Let's take Brent crude oil as an example to review the history of international crude oil prices (Brent crude oil produced in the North Atlantic North Sea Brent region, low sulfur, light, good quality). Before the 1970s, the world's oil is mainly controlled by the seven sisters of the Western oil companies, the price of crude oil has long been stabilized at less than 2 U.S. dollars / barrel. the first oil crisis in the early 1970s rose to 12 U.S. dollars / barrel, the end of the 70s when the second oil crisis quickly rose to 40 U.S. dollars / barrel.
In the mid-80s, Saudi Arabia sold oil at low prices, non-OPEC producers' output grew, market demand was low, and the price of oil fell back overall to $10/barrel by the end of 1998.
After the financial crisis in 1998, as emerging market countries led by Brazil, Russia, India and China's BRIC countries began to develop rapidly, the demand for crude oil increased dramatically. Crude oil prices from more than a dozen dollars a barrel, all the way up to 2008 close to 150 U.S. dollars / barrel. As the saying goes, "climb high, fall hard", followed by the financial crisis, the oil price from the peak of the rapid pull into the abyss, less than 5 months, fell to nearly 40 dollars, such as the roller coaster.
Subsequently, through OPEC several production cuts to protect the price, governments actively rescue the market, the economy gradually stabilized, demand rebounded, oil prices rebounded. Unbeknownst to the public, this period halfway out of the program - the United States shale oil (from the oil mudstone, shale fracking extracted from the crude oil). U.S. shale oil after decades of development, finally fat and strong. 2011, the U.S. shale oil production exceeded 50 million tons for the first time, in 2012 to reach 100 million tons, in 2014 to reach 200 million tons, in 2018 exceeded 300 million tons (accounting for the U.S. consumption of 900 million tons of crude oil in the year 1/3), just like the crude oil market, "bar handle! ". The massive increase in crude oil supply, coupled with OPEC's refusal to cut production (intended to strangle U.S. shale oil, which does not have a cost advantage, through low oil prices), saw Brent crude oil fall from around $115 in mid-June 2014 to around $30 in late December 2015.In 2018, due to the production cuts made by OPEC and Russia, the price of oil had recovered to break through $80 a barrel for a time.
No one could have imagined that the sudden ravages of New Crown Pneumonia in 2020 would have such a huge impact on the demand for crude oil. Production shut down, transportation blocked, billions of people home quarantine, the sky aircraft sparse, the ground roads open ......, the price of crude oil also fell to the freezing point ......, is now in the middle of a slow and difficult recovery.
Second, the influence of oil prices and the future geometry?
From the history of international crude oil prices, essentially still controlled by supply and demand. There are many factors affecting the supply and demand relationship, the main oil-producing countries to increase or decrease production measures, the economic development of large consumer countries, the progress of related technologies (exploration and development technology advances, fuel efficiency improvement, the development of new energy sources, etc.), and other such as wars, general strikes of oil workers, abnormal weather, the recent pneumonia epidemic and other emergencies can also cause sharp fluctuations in oil prices.
What will happen to international oil prices in the future?
In my humble opinion, in the short term, under the impact of the new crown pneumonia, the shrinkage of production and economic activities, people's travel activities significantly reduced leading to a rapid decline in demand for crude oil; on the other hand, the production of crude oil can not be quickly reduced (crude oil production is not a faucet out of the water like that can be opened as you turn it off), the market situation of supply of crude oil continues to increase over demand. Subsequently, with the recovery of production in various countries, especially China's gradual victory in the fight against the epidemic, production and economic activities are rapidly resuming, and will increase horsepower to recover the delayed production, the demand for crude oil will gradually rebound. I believe that after the epidemic, oil prices will quickly return to the level before the epidemic, and even to a certain high level.
In the medium to long term, oil prices should return to a reasonable range of fifty, sixty, sixty or seventy dollars per barrel, which is in line with the interests of many parties. Even if OPEC forces the non-cost-competitive U.S. shale oil out through a price war (there are already companies in bankruptcy), it will be temporary because no one can afford to sell crude at cost or at a loss for a long period of time. Even if the cost of oil production is very low Middle East countries such as Saudi Arabia, Kuwait, Qatar, etc. (the cost of producing a barrel of crude oil in a few dollars to more than a dozen dollars), it is difficult to sustain. After all, the above countries of the financial and economic highly dependent on crude oil exports, always spend money like dirt trench because of low oil prices, income reduction and go to eat dirt, is never can not. Must be through appropriate production cuts, so that oil prices back to a relatively high position, to maintain a better financial position. Once the price of oil returns to a higher level, shale oil will soon return to prosperity, and more and more tenacious (technological advances in production costs will be gradually reduced), such as the undead little strong general.
On the other hand, the tightening of environmental protection policies in various countries and the booming development of various new energy sources will squeeze the space of coal, oil and other carbon-intensive energy consumption. Currently and for a longer period of time, although the proportion of coal and oil in energy consumption will gradually decrease, but the absolute consumption will still slowly increase. After all, the economies of populous countries such as China and India are still developing at a relatively fast pace, and there is still a greater demand for growth in energy consumption, and the growth in oil consumption in China and India in 2018 accounted for 2/3 of the global growth. the GDP growth of other Southeast Asian and African countries has also been relatively eye-catching in recent years (if there is no water). As the economy grows, people's demand for energy increases, and there is still a large gap between the per capita consumption of oil in numerous developing countries compared to developed countries.
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Crude oil prices are too low, and not all good. The price of oil is too low, in addition to the heavy impact on the oil and gas exploration and development industry, will also have a good momentum of development of the clean energy industry to bring a serious blow to curb its development. And clean energy is one of the important means to reduce or even get rid of the high degree of dependence on crude oil in the future, at present, our crude oil dependence on foreign countries has reached as high as 70%, to ensure the security of energy supply has become a priority.
The factors affecting international oil prices will become more and more complex.
Third, the impact on the upstream oil people
Well, let's look at the changes in international oil prices on the upstream (E&P) oil people.
At one time, with that love, he enrolled in the industry's "Whampoa Military Academy". The impression is that those towering derricks, huge platforms, such as the network of pipelines, the roar of the machine, coupled with the "only desolate desert, no desolate life", "would rather live less than twenty years, desperately want to take the big oil field" type of heroic (teaching) words (education) strong (proclamation), very capable The words (rumor) can make people's blood run cold. Indeed, you will feel that this line of work are engaged in the battle of the big things, instantly feel very "honor".
Over a decade ago, oil prices were high and red all over the sky, exploration and development was in full swing, and graduates of the main petroleum specialties (geology, physical exploration, petroleum engineering, storage and transportation, etc.) were exceptionally in demand. Employment is not at all worried, worried about which one to go. We are looking for a job is to put together a resume, go to the department store to find a cheap suit to wear a man-like, waiting for the arrival of the three major oil recruitment army. The supply/demand ratio for graduates of the main majors is often 1 to several, or even 1 to 10. With demand outstripping supply, students in the main majors can bring along their male and female friends who are not majoring in petroleum to sign up for a job with them. Excellent even heard that you can take three (not limited to male and female friends); I also heard that there are playing games failed a few classes, in the job fair is almost over rushed into the gymnasium, to prove that they are the main professional student ID card to the recruiter threw in front of the face, can also be signed. At that time, the petroleum trunk majors walking on the road are all happy and proud, with walking with the wind is not too much to describe. How many general-purpose students dreamed of switching to the petroleum mainstay program ......
Thirty years east of the river, thirty years west of the river. In recent years, the dismal crude oil prices, staff saturation, the three major oil is no longer grouped into the school recruitment, and many other companies, like the use of online casting, assessment, merit-based organization of interviews, and the number of demand has been significantly reduced. Students must work hard and show their talents to the best of their ability to gain favor and get a position. Some of the main petroleum students either switch to general majors and a variety of certificates, or outside to find the Internet, the financial industry internships, in order to change careers to prepare in advance. Those shiny oil foreign companies have been withdrawn from China, replaced by the Internet big factory has become the ideal employer for students, tend to be.
The upstream petroleum people in the workplace are also having a hard time. The oil and gas companies have asset restructuring, cut spending, optimize personnel, some people are forced to leave the upstream industry. State-owned enterprises, although not layoffs, but the subject project obviously reduced a lot, many people idle. Foreign oil service companies, such as Schlumberger, Halliburton is a large reduction in the project, revenue, profits fell sharply, and continue to cut staff.
Compared to the traditional industry's struggles, the rapid rise of Internet +, artificial intelligence, big data, cloud computing, etc., a thriving scene, the iteration speed is getting faster and faster. These emerging technologies are also gradually and continuously integrated into the traditional industry, prompting the traditional industry to continuously improve efficiency, ushering in the opportunity to develop again. Oil and gas exploration and development is no exception, the integration of exploration and development technology, visualization technology (VR), precision fracturing, intelligent subsea plant, etc., changing the traditional understanding of exploration and development and means, "digital oilfield", "intelligent oilfield" construction in the ascendant. Recognition of the change is very critical, the industry is sometimes too much focus on experience, relying on inertia to choose, after the "baptism" of low oil prices, will be more enthusiastic about accepting new ideas, new technologies, new methods. As in the school students from the past job search "wait, rely on, want", to today's "break, dry, fight", is a positive change.
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This is an era of rapid change and fierce competition. It can also be said that this is the best of times and the worst of times. Not only oil and gas exploration and development, regardless of which industry, the only way to meet it, adapt to it, prepare in advance, perhaps the phoenix nirvana. After all, the era of the express stop time is very short, rumbling away, no one wants to remain on the platform.