Veteran commodity analyst: The market may adjust positions in the short term based on political statements
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However, senior commodities analyst Jeff Currie reminded in an interview that the market may adjust positions in the short term according to political statements, but ultimately it still comes down to one core issue: whether the actual oil supply is sufficient. Currie pointed out that as the conflict continues, global oil inventories are still declining. In just the past week, inventories have decreased by about 17 million barrels. He also noted that, on the surface, there are still around 8 billion barrels of global oil inventories, but a large portion of this is pipeline fill and system-required stocks, which cannot actually be tapped by the market. In Asia, the supply pressure is not only evident in the crude oil market, but is also being transmitted down the line to a key refined product—naphtha. Naphtha is a fundamental raw material for many chemical products, and is therefore sometimes referred to as the “flour” or “rice” of the industrial sector. According to British consulting firm Oxford Economics, Japan and South Korea are the countries most affected by the current supply shortage. In South Korea, the shortage of naphtha has already begun to impact the petrochemical industry chain. A report from The New York Times pointed out that some South Korean petrochemical giants have been forced to significantly cut operating rates, and some chemical manufacturers, due to a lack of raw materials, are unable to deliver orders as agreed to major automobile and electronics manufacturers, declaring that related deliveries are affected by “force majeure.” Additionally, there is analysis suggesting that South Korea’s semiconductor industry has also been affected by the naphtha shortage.
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