1 euro = 1 dollar hit a record high crude oil prices plummeted: domestic oil prices may continue to drop, filling a tank of oil is cheaper

In the early morning of the 13th Beijing time, crude oil futures prices fell sharply on Tuesday. U.S. WTI crude oil fell below $100 and hit the lowest closing price since April, down 7.92% to close at $95.84 per barrel.

With no major disruptions on the supply side, U.S. WTI appears to remain below $100 a barrel for some time until the demand outlook improves.

Regarding the continuous decline of international crude oil prices, some analysts in the circle said that the corresponding domestic oil prices also have a demand for continuous reductions, and before this, oil prices have continued to decline (The new round of domestic refined oil price adjustment window opened at 24:00 on July 12. The retail price of domestic gasoline and diesel was lowered by 360 yuan and 345 yuan per ton respectively. Filling a tank of No. 92 gasoline will cost 14 yuan less. ).

Regarding global inflation, commodities led by oil fell across the board, which also led to the EUR/USD falling below the important psychological threshold of 1.0000 in a short-term on July 12, setting a new low since December 2002.

According to some experts, as Europe’s energy crisis intensifies and the risk of recession drags down, the euro may fall to the 0.9 level against the dollar in the next few months. The euro fell below parity, meaning recession fears reigned supreme. The euro has fallen nearly 12% against the dollar so far this year, almost to its inception price.

Generally speaking, a weaker euro will help increase the competitiveness of European goods in international markets and further stimulate economic growth, which is usually welcomed by European policymakers. But at the same time, the continued weakness of the euro will continue to push up European import costs, further pushing up inflation. A weaker euro may not be what the ECB wants right now, especially with inflation rising to a record 8.6%.

According to Deutsche Bank strategists,If the euro zone falls into recession, currency markets will be in the historic extreme chaos since the end of the Bretton Woods system in 1971, and the euro is likely to fall further to $0.95-$0.97.

It should also be noted that the pace of U.S. dollar interest rate hikes is accelerating. Economists predict that U.S. inflation will continue to heat up in June, reaching a new peak since the epidemic, making the Federal Reserve sure to raise interest rates again later this month.

Accelerating inflation likely reflects higher gasoline prices and stubbornly high food prices. National retail gasoline prices topped $5 a gallon in mid-June, contributing at least 0.5 percentage point to the CPI’s month-over-month increase, Bloomberg Economics said ahead of Wednesday’s CPI report.

Oil prices have begun to fall this month, indicating that the July CPI data may ease. While inflation remains high, there are signs of cooling, as bloated retail inventories lead to discounts and used car prices soften. The core CPI, which excludes energy and food, was likely to have risen 0.5% in June, the slowest rise in three months.

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