The market: oil prices will not have much space

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Continuous drop in international oil prices recently, New York main oil futures contract fell below 80 U.S. dollars a barrel mark. May 6th Asian electronic trading hours, international oil prices fell as low as 78.87 U.S. dollars per barrel.
Market participants believe that the spread of sovereign debt crises in Europe and energy demand is expected to pick up weaker than the enthusiasm of investors, the market is adjusting to the economic recovery and understanding of the fundamentals of crude oil.
Zhou Lei Li Shanghai mid analysts in an interview, said: "The European sovereign debt crisis of some severity was unexpected, this problem has been seriously affected the stability of the euro-zone economy, the joint operation between the European Union IMF also illustrates the problem sex. "Large futures analyst Li also pointed out that:" the adjustment of crude oil is in steep decline, the recent dollar decline is mainly affected by the appreciation of the debt crisis, the deepening impact of the euro zone. "
Internationally renowned rating agency Moody's on May 5 has all the ratings for possible downgrades include the Bank of Portugal list, and warned that Portugal's sovereign credit rating may be lowered, saying "the current market situation is very unfavorable, but the Portuguese government's financing costs have emerged rise. " Previously, the rating agency Standard & Poor's sovereign credit rating has been lowered to the Greek "junk" grade, and the gradual reduction in the Spain and Portugal's sovereign credit rating.
Worse, in the Greek government to the EU commitment to reduce public sector expenditure, in order to reduce the budget deficit of 3% in 2014, they triggered protests and even violent acts of terrorism. In order to escape the debt trap and the economic crisis, the Government had to transfer some of the debt pressure on the people. Deflation will undoubtedly exacerbate the hardship of the people, pensioners and low-income people will face more social income of the poor and higher taxes.
This is not the end, the industry believes that the next few months, these countries also face the risk of continued degradation.
U.S. Energy Security Analysis, Managing Director, Sarah? Emerson said, as long as the euro continued to decline due to the debt crisis in Europe, oil prices will face downward pressure.
European sovereign debt crisis has seriously undermined the market's confidence in the global economic recovery, the recent global capital markets Pudie, investor risk aversion than ever before. The decline in international crude oil within the past two days has more than 7%.
In addition, the debt crisis in Europe caused the euro against the dollar over the past year low refresh a row, and for a time under 1 euro 1.2804 U.S. dollars touch the nearly 14-month lows, making dollar-denominated oil futures "worse."
In addition to sovereign debt problem, a continuous increase in U.S. crude inventories also undermined investor confidence in the future energy demand. According to the United States Department of Energy announced on May 5 the data, U.S. crude oil inventories last week increased by 280 million barrels, higher than the average market forecast of 154 million barrels of the increase is almost double; the same period increased by 120 million barrels of gasoline inventories, including heating oils , distillate stocks, including diesel fuel increased by 60 million barrels, an increase of greater than market expectations.
Although international crude oil prices still fell the shadows, but the market for crude oil and long-term trend is still confident. Medium-term futures analyst with Beijing Chenyue Jiang pointed out that New York crude oil prices in recent months, showing current contract, and far less strong pattern on the contract, mainly worried about the recent and expected future excess demand will improve the combined effect of demand for crude oil will peak due to petrol consumption gradually into the season.
Zhou Lei Li also said: "The recent crude oil prices remained low not alter the strong, not much downside in oil prices will rebound after the bottom."

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