Chapter 1311 Two fires lead to a crisis
International crude oil prices and international natural gas prices have fallen for three consecutive days.
As the saying goes, good fortune never comes alone, and misfortune never comes alone!
Just when everyone thought that international crude oil prices and international natural gas prices had hit the bottom and were about to rebound.
China's 7 o'clock news broadcast a piece of news. The host of the 7 o'clock news introduced with a joyful tone that China Petroleum Group Corporation had made a huge breakthrough in shale oil technology, reducing the cost of shale oil extraction to $25 per barrel.
As soon as the news came out, it shocked countries all over the world and the entire energy market!
Shale oil, countries around the world have rich shale oil reserves, and there is no one who is not studying how to extract it.
After all, oil is a non-renewable resource. The easy-to-extract oil now is probably enough for the world to consume for decades, and it is inevitable to extract difficult-to-extract shale oil in the future.
However, the disadvantages of shale oil extraction are also very obvious, such as difficulty in extraction, high extraction cost, environmental impact, technical limitations, etc.
It is precisely because shale oil extraction faces multiple challenges that the amount of shale oil extraction has not been high so far.
The United States has the highest shale oil production, with a daily production of about 5 million barrels, and the cost is as high as $90 per barrel.
Of course, this cost includes a lot of upfront investment, such as purchasing land, etc.
This is why the United States wants to raise international energy prices.
On the one hand, it can make money by controlling Iraqi oil and relying on Iraqi oil exports, and on the other hand, it can develop shale oil and increase the scale of shale oil production.
However, facing China's revolution in shale oil technology, international crude oil prices and natural gas prices have been hit hard again.
Even if many funds want to support oil and natural gas prices and go long on oil and natural gas.
But there are also people who short oil and natural gas, and the two sides are competing.
Under the successive blows, more people stopped losses in time and became short sellers.
Blow up!
Continuous blow up!
It is not just the national crude oil prices and natural gas prices that have been hit hard. In the United States, shale oil production has become profitable due to rising oil prices, and shale oil companies' stock prices have continued to rise, or financing has become easier, but now the stock prices have also collapsed.
After all, the price of shale oil mining is still very high now!
Even if we don’t consider land and infrastructure, the maintenance cost of drilling alone is still as high as $50 per barrel.
When the price of crude oil is lower than $50 per barrel, shale oil mining will become unprofitable.
This is cruel, but this is the world!
Whether it is industrial products or raw materials, the lower the cost, the more competitive it is.
What is triggered at this time is not just the decline in international crude oil prices and natural gas prices, but an economic crisis!
After all, if long positions are liquidated, the funds lost are hundreds of billions of dollars!
Losing so much money, many of those long positions will be affected.
A single move can affect the whole body!
The economic crisis was originally concealed by everyone, and the Federal Reserve has repeatedly denied that an economic crisis has broken out in the United States.
But now, it can’t be concealed even if you want to!
When the head of the Federal Reserve and the US Treasury Secretary were interviewed by media reporters, they had to express regret one after another, saying that now it is indeed a financial crisis.
The entire European countries also admitted one after another that an economic crisis has indeed broken out, and it requires all countries to unite and work together to overcome the difficulties.
Beijing, Siheyuan.
Liu Tao looked at the briefing prepared by his secretary, which seemed to be much faster.
After reading it, Liu Tao showed a satisfied look.
The third fire had not yet been lit, but only two fires had been burned, and international crude oil and natural gas had collapsed directly.
Directly cut in half!
The effect of these two fires was somewhat beyond Liu Tao's expectations.
Originally, he thought that he had to burn three fires to really smash the market.
In less than ten days, it completely collapsed.
And looking at the current situation, I am afraid that the prices of oil and natural gas will fall further.
Really return to the market price they should be at.
Where there is an economic crisis, it is completely unreasonable for commodity trade to be at a high level.
The Americans want to release water, but there is no way they will not bear the cost.
Quantitative easing, just four words, is the irresponsibility of European and American countries, transferring the cost to developing countries.
This is not okay!
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Since you dare to quantitatively ease, you have to taste the backlash of quantitative easing.
Liu Tao didn't know whether the European Five Pigs would happen again.
But he knew that European and American countries would definitely not feel good this time.
The decline in oil and gas prices is actually good for Europe, but Europe is too closely connected with the United States, and the US economic crisis will inevitably affect Europe.
Even Liu Tao didn't know how many companies Americans controlled in Europe.
After the outbreak of the economic crisis in the United States, a large number of Americans must have withdrawn their capital from Europe and returned to their country to tide over the difficulties.
As the saying goes, opportunities are opportunities, and there are crises and opportunities!
If Europe can seize the opportunity and take this opportunity to achieve economic autonomy, it would be a good thing for Europe.
For Europe, only political independence, economic independence, and military independence, that is, becoming an independent sovereign state, can Europe truly become a real European Union, that is, the European integration envisioned and pursued by Europeans.
Otherwise, it would be difficult for Europeans to achieve European integration.
To be honest, from China's perspective, European integration is a welcome development.
Because China is not pursuing hegemony, nor is it pursuing bipolar hegemony, but a multipolar world.
Europe becoming one pole means that Europe and the United States are no longer one, but there are many individuals with different interests.
Liu Tao does not know how big an impact this economic crisis will have.
He vaguely remembers that the economic crisis in the original time and space was called the most serious economic crisis in the world since the Great Depression in 1929.
This crisis led to the collapse of the financial systems and credit markets of many countries, a sharp decline in international trade and investment, and the closure of many industrial and service enterprises.
The root causes summarized at the time can be traced back to several key factors, including real estate bubbles, loose credit standards, high-risk investments of financial institutions, and dereliction of duty of regulatory structures.
It was also during this crisis that classic remarks such as "too big to fail" were born.
The real estate bubble, reflected in the fact that under the influence of the real estate market bubble, financial institutions began to invest heavily in real estate, which led to excessive expansion of the real estate market and excessive increases in housing prices. Once the real estate market bubble burst, the balance sheets of financial institutions suffered huge losses, leading to the bankruptcy of financial institutions and serious problems in the credit market.
The loosening of credit standards is that in many countries, financial institutions began to inject a large amount of funds into the market by issuing high-risk loans and improper credit. This loose credit standard led to excessive investment in high-risk bonds, which could not be repaid due to high risk. This led to serious problems in the balance sheets of financial institutions.
The high-risk investment of financial institutions is reflected in the fact that many financial institutions obtain high returns by investing in high-risk investment products. This behavior encourages financial institutions and other investors to invest in high-risk products, and high-risk investment is also one of the reasons for the serious problems in the balance sheets of financial institutions.
As for the dereliction of duty of the regulatory authorities, let alone, it is simply criticized to the point of speechlessness.
But no matter what, this crisis was caused by the Americans themselves, which is the real root cause!
In the original time and space, the Americans passed the crisis on to the whole world, and then relied on the help of Huaxia to overcome the difficulties, but in turn tore their faces. (End of this chapter)
