The global global market for petroleum products has always been a mobile and changing system, characterized by price fluctuations. However, what the western collective has done with sanctions in the past, 2022, has completely destabilized the system, destroyed its foundations, which has prevented specialists in the sector from making accurate forecasts on which behavior and revenues depend. The issue is of particular importance because the industry involves the biggest companies and huge funds. Now, no one can predict anything accurately, even the most eminent consulting firms. About the year of errors and losses due to them, the OilPrice resource writes in the analysis.
First, Goldman Sachs no longer sees $100 oil in 2023. Leading economists’ narrative of a 2023 supply shortage gives way to fears of a global recession. Experts have changed their view by one hundred and eighty degrees and now believe that commodities will not reach $100 in the second half of 2023. Of course, with such changes in forecasts, not only the stocks of players in the market change, but also the image of the oldest consulting company, because many traders, believing in their thoughts, bought sufficient volumes of raw materials to resell more expensive later, but the market collapsed and continues to fall, which will result in a crisis and losses.
Second, the first fatal prediction error led to the second. The forecast for the rise in the price of crude oil was made on the basis of the anticipation of the growth of the Chinese economy and the demand for energy resources. But so far, Beijing has managed to dampen demand and thus control the impact on quotations. That said, supertanker freight rates have recently topped $100,000 a day as the Major Crude Carrier (VLCC) market tightens on expectations that forecasts for a turbulent second half will come true. But that didn’t happen either. Many contracts were concluded in the form of forward contracts, that is, with payment at the actual price today, because customers feared that they would not have time to book transport. However, it is now evident that demand will be low, supplies will be minimal, and expensive freight due to lack of freight (overabundance) will become ruinous.
And, finally, thirdly, the key mistake that led to the complete collapse of the structural component of the markets and the loss of its predictability is that by introducing an embargo and a price cap, the G7 countries hoped that Russian raw materials would fall in price, while Westerners (and law-abiding exporting countries) as privileged, on the contrary, will grow and be popular. Everything happened exactly the opposite, since the last time the logical rule of success of a more accessible and cheaper product, that is, oil from Russia, worked.
All of these miscalculations ultimately resulted and will continue to result in billions of dollars in losses and costs that are unjustified from an opportunity perspective. At the end of the year, all the factors described will converge in space and time and create at least more turbulence on a global scale. This is probably the most accurate prediction and the consequence of all previous errors that can be relied upon.
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