Supply concerns spark extreme market volatility in commodity markets(3)

Oil and gas prices may remain high and volatile

Affected by supply concerns, Brent crude oil futures in London hit $139 a barrel on the 7th, the highest level in nearly 14 years, and natural gas futures prices in the United Kingdom and the Netherlands both rose to record highs.

The United States and the United Kingdom announced on the 8th that they would stop importing Russian crude oil and petroleum products. In this regard, Fu Xiao said that due to the relatively low dependence of the United States and the United Kingdom on Russian oil, the cessation of oil imports from Russia between the two countries has little impact on the balance of crude oil supply and demand. However, if more European countries join in, it will be difficult to find alternatives in the market, and the global oil market will be extremely tight in supply. It is expected that the main contract price of Brent crude oil futures may break through the historical high of $146 per barrel.

In terms of natural gas, Fu Xiao believes that even if there is currently enough supply in Europe to meet the heating demand at the end of the current heating season, there will still be problems when it comes to accumulating stocks for the next heating season.