Crude oil production and supply is facing a combination of differentiation"

Since 2014 June, both the United States and British Beihai, West Texas light crude oil prices fell to Brent, has more than 50%. At the same time, international oil prices have not yet rebounded significantly. The reasons for the international crude oil prices fell rapidly, and the future of the oil market impact and other issues, the EU finance association (SEFIN), well-known experts, global head of Deutsche Bank foreign exchange liquidity products and commodities market risk accepted Mr. Wu Jing "Economic Daily" reporter interview.

Wu Jing believes that the promotion of oil production technology and energy technology, emerging markets and the European market demand and other fundamental factors such as strong dollar and other technical factors are part of the reason for the decline in oil prices. However, the most important reason for the sharp decline in oil prices in the short term is the international crude oil market, the market share of the dispute". As the economic structure and income from a relatively simple organization of Petroleum Exporting Countries (OPEC), the core of the Gulf oil producers not yield concern in the global oil market, but the market pricing and the related market share.

Wu Jing believes that Saudi Arabia and other countries have seen in recent years, the development of the natural gas market share has been diluted, the consequences of weakening pricing. Since 2008 of June, a large number of oil and gas supply by the international market, the international natural gas prices all the way down. Even in the past two years and two seasons peak energy demand, the international price of natural gas has little more than $6 per million British thermal unit price, far after the peak of $12 / million BTU to $13 per million British thermal units fold difference. This also led to rely on traditional technology to extract natural gas market share decline in large companies, profit margins fell sharply. For this reason, Saudi Arabia and other oil producing countries are likely to be able to significantly reduce the market share of any of the upstream trends.

Needless to say, in recent years, the most important development of global crude oil production is the maturity and development of shale oil and gas technology. In the United States, for example, before shale oil production in 2008, its crude oil production is less than 5 million barrels per day; today, more than 200 oil shale wells, driven by its crude oil production has more than 9 million barrels per day. The United States is the second largest oil producer after Saudi Arabia, compared with opec. High oil prices are expected to drive the rapid increase in investment in shale oil extraction. This is undoubtedly the core oil producing countries have led to the impact of market dominance. However, the main goal of the market share of OPEC core oil market is not limited to shale oil and gas, but the core oil producing countries, including almost all countries in the crude oil production sector. Because of this, even if the current OPEC members such as Venezuela"s economy faces a low oil price shock, Saudi Arabia and other Gulf oil producers have refused to cut prices, even refused to discuss any emergency meeting production.

In the Gulf oil producing countries at the same time, with the impact of oil prices to maintain market share, while other high cost crude oil is facing the two evils phase of the embarrassing situation. Shale oil in particular, subject to geological conditions and technical costs and other factors, the average cost of production at $90 / barrel. In huge fixed costs, the existing shale oil and gas producer in oil prices lower than the total cost of sustainable mining while facing a loss situation, but also can maintain or expand production capacity, in order to reduce the extent of loss, which further promotes the international crude oil market prices down.

This round of the rapid decline in the long-term effect of crude oil on the international crude oil market, Wu Jing believes that the Gulf countries through a series of initiatives to maintain its market share, not only to suppress the high cost of crude oil production of shale oil, shale oil enterprise capital chain caused by the current high debt of high tension, but also for the future high cost of crude oil the formation of a considerable deterrent effect. This is likely to lead to a new round of global crude oil production and supply in the medium and long term differentiation".