Experts highlight recovery but also risks in global oil market

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By CGTN's Li Ying

The global oil market went into decline at the end of May with crude oil prices dropping by 17 percent in Europe and America in the period from May 24 to June 21, bringing them to their lowest point in 10 months.

At the same time, China also cut retail prices of gasoline and diesel for a sixth time this year, responding to oil pricing elsewhere.

The country adjusts domestic retail oil prices when international crude prices change by more than 50 yuan per ton within a 10 working-day period.

But contrary to pessimistic predictions about the oil price dropping to 30 US dollars per barrel, the market was boosted by some players’ bargain hunting as they spotted an opportunity. As a result, the global crude oil price was up by 11 percent, or nearly 5 US dollars per barrel, from June 22 to July 3.

VCG Photo‍

Speaking at a conference in Beijing on Wednesday, analysts from consultancy firm Wood Mackenzie predicted the global oil market will continue stabilizing in the short-term with prices set to rise in the second half of 2017.

Global oil demand is expected to increase by 12 million barrels per day through 2035, according to the consultancy.

It is likely that oil demand in China will continue to grow at a slower pace in the next 18 years, as the country seeks to transition to a more sustainable mode of development.

Although the recovery has been significant, it is not time to relax in an industry buffeted by geopolitics, war and downside risks on the demand side, according to Fu Feng, Wood Mackenzie head of cross-commodity analytics.