Since the year 2020, the international crude oil market has changed a lot and made history. On April 20th, the international oil prices went below zero, renewing investors’ perception on crude oil trading. The emergence of negative oil prices has a great impact on all forces in the market, and triggers people’s deep thinking on market restructuring.Oil CompaniesThe “cold winter” of the oil industry has become colder in 2020. This year’s “anomaly” in the international crude oil market also brings greater risks and challenges to the hedging of oil companies.Financial MarketMany financial institutions invest in petroleum products as part of their portfolio allocation for their customers or themselves. Negative oil prices pose unprecedented risks to such products. After the shock of the negative oil prices, I believe that the financial products around crude oil will face new adjustment.Oil ReservesGenerally, low-oil-price period is a good opportunity to increase strategic reserves. The current historic low oil prices also provide a chance for China to carry out the plan to increase the strategic reserves. How to seize the historical opportunity and further expand China’s reserve capacity have become a problem that the state and oil companies need to think about right now.ConsumersChina has set a pricing floor for crude oil prices in the “Oil Pricing Management” issued in 2016, which indicates that the negative oil prices will not have a direct impact on China’s consumers, and the price of China’s refined oil will remain stable for a long period of time.
