Oil plummeted and US stocks melted twice a week. What signals did it release?

Last week (March 9th to March 13th), international crude oil prices fluctuated sharply.

On March 9, both Brent crude oil futures and West Texas light crude oil plummeted by 25%, setting the biggest one-day drop since the 1991 Gulf War. On the 10th, part of the decline in oil prices dropped. The price of Brent crude oil in the New York market once hit a day high of $ 38.22 per barrel; the price of light crude oil in West Texas reached a high of $ 34.60 per barrel. On the 11th, the domestic futures market closed mixed, and crude oil fell more than 10%. On March 12, the price of the Brent crude oil futures market fell. The main contract was reported at $ 33.22 / barrel, a decrease of $ 2.57. The price of the United States WTI crude oil futures market fell, the main contract was reported at $ 31.50 / barrel, a decrease of $ 1.48.

What are the reasons for the plunge in oil prices?

Undoubtedly, the global epidemic will definitely have an important impact on oil prices. With the spread of the new crown epidemic to the world, the global economy has been negatively affected to some extent. Due to the spread of the epidemic, everyone is quarantined at home, global productivity has fallen, business resumption has decreased, and demand for crude oil has decreased. Against this background, oil prices have fallen.

However, the fuse that caused the drop in oil prices was the failure of the Saudi-led Organization of the Petroleum Exporting Countries (OPEC) and Russia-led non-OPEC oil-producing countries at the ministerial meeting on March 6 after the first quarter of this year. Consensus on production reduction policy, which means that starting from the second quarter, oil-producing countries will no longer be bound by this Vienna Union coordination mechanism

Some experts have analyzed that the panic in the market will be further exacerbated by the price war. The plunge in oil prices is expected to exceed the decline that should be brought about by fundamental changes. However, the fundamental supply and demand situation will still be the dominant factor affecting oil prices, and oil prices are bound to usher in a return at the right time. Until then, some oil-consuming countries may have a rare window of opportunity.