At this point, Yi Anguo had liquidated all his positions. He transferred out another $210 million, leaving only $100 million in his account. As the international crude oil futures price rose to $61 per barrel, he decisively purchased 30,000 short contracts.
Based on his memory of the 2007 international crude oil futures price trends, the year began with the price in a continuous, steep decline.
With supply and demand fundamentals, geopolitical risks, and speculative capital remaining relatively stable, weather became the most important factor affecting oil prices. A mild winter reduced the demand for heating oil, and stockpiles were higher than expected, prompting a sharp decline. On January 18th, the price of crude oil futures in the New York market fell to $50.48 per barrel. This was a 34.5% decrease from the historical high of $77.03 set in July 2006, sinking the price to its lowest point in nearly twenty months.
When the international crude oil futures price dipped to $58, Yi Anguo bought an additional 20,000 short contracts. When prices fell further to $55, he added another 30,000 short contracts.
On January 18, 2007, when the price dropped to $51 per barrel, Yi Anguo began to liquidate all of his short positions ahead of the market bottom. By then, the total assets in his international crude oil futures account had reached an astonishing $660 million.
Yi Anguo once again withdrew funds, transferring out $560 million and leaving just $100 million in the account.
When the international crude oil futures price fell to $50.50, Yi Anguo immediately bought 50,000 long contracts.
In March, international oil prices began a steady and sustained rebound. A nationwide blizzard in the United States stimulated demand for heating oil, and this sudden change in weather became the catalyst for the oil price recovery. By February, prices had already returned to the $60 per barrel level.
From March to June, a mix of factors came into play. On one hand, the weather gradually warmed, improving the U.S. oil inventory situation. On the other hand, Total U.S., BP, and Chevron all experienced operational failures that reduced their oil output. These interwoven factors caused international crude oil prices to fluctuate widely between $56.50 and $66.
In the second half of the year, the rebound in crude oil prices accelerated and broke new records. Starting in July, the price surge gained even more momentum. Despite a slowdown in the U.S. economy, the economic growth of Europe and Japan was significantly better than expected. Meanwhile, the rapidly growing economies of countries like China and India buoyed strong global demand for oil.
Tight gasoline supplies in the U.S. and ongoing refinery problems continually plagued the international oil market. The escalating Iranian nuclear issue and rising tensions in Nigeria, combined with pipeline leaks in New York and along the U.S. Gulf Coast, contributed to a fluctuating upward trend. As a result, international oil prices approached $70 per barrel by late June. On July 31st, the price reached $78.21 per barrel, surpassing the previous year's historical peak.
In August, the U.S. subprime mortgage crisis caused a brief, sharp decline in international crude oil prices, but they resumed their upward trend in September. The central banks of Europe and the United States undertook joint intervention measures, pumping funds into the financial markets. This, to some extent, stabilized the situation and alleviated the effects of the subprime crisis.
At the same time, Tropical Storm Dean, which formed in the Atlantic, threatened oil production facilities in the central Gulf of Mexico. This potential impact on supply caused international crude oil futures prices to rebound once again. By September 13, the WTI crude oil futures price in the New York market broke through $80. On October 19, it surged past $90 during intraday trading before closing at $89.47, setting a new historical high.
In November, even though OPEC announced an increase in production of 500,000 barrels per day, it was unable to halt the rise of international crude oil prices. By December, the price peaked at just over $99 per barrel, a hair's breadth away from breaking the $100 mark.
In the first half of 2008, international crude oil prices soared even higher, reaching a peak of over $147 per barrel by mid-July. During this period, the battle between bulls and bears was extremely fierce, with significant daily price swings. The gap between the daily high and low often reached five or six dollars, and a difference of over ten dollars was not unheard of.
Afterward, prices began a steady decline. By Christmas Eve 2008, international crude oil futures had tumbled to $36 per barrel. In just over five months, the price had plummeted from $147 to $36 a barrel.
In the second half of 2009, as the world economy began to recover, international crude oil futures prices rose once again, reaching nearly $80 per barrel.
From 2007 to 2009, the international crude oil futures market experienced dramatic booms and busts. For someone who had mastered its trends, making money was incredibly simple.
With such robust financial backing, Yi Anguo could increase his investment in the Anjing website, accelerating the development of its proprietary logistics system and hastening the launch of the Anjing online supermarket in major cities across the nation.
Furthermore, he could continue to ramp up his investments in Huaxin Company whenever it needed funding.
Having committed to this path, Yi Anguo intended to do his best. He aspired for Huaxin to one day surpass Center International.
Moreover, Yi Anguo hoped that Huaxin would not just be like Center International—merely manufacturing chips on a contract basis—but would instead develop comprehensively across the entire semiconductor industry.
Even if your contract manufacturing produces superior chips with advanced technology, it is all for nothing without even more advanced equipment. You will still be vulnerable to being throttled by foreign powers.
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