Comparable to Hollywood blockbusters! Oil turns around

category:Finance
 Comparable to Hollywood blockbusters! Oil turns around


At present, most of the hope for the prevention and control of the epidemic lies in the recovery of temperature. If the hot weather can prevent the spread of the virus, then we believe that the epidemic will be controlled soon, otherwise the recovery of demand is still far away. Therefore, we can take the demand as the reference of the top range of crude oil price and the supply as the reference of the bottom range.

OPEC monthly report

In the OPEC monthly report, investors are most concerned about demand. From the perspective of OPECs outlook on global crude oil demand, OECD countries demand is expected to decline by 5.2 million barrels / day, including 2.34 million barrels / day in the United States, 1.64 million barrels / day in Europe and 950000 barrels / day in China. The global crude oil demand in 2020 will be 9.08 million barrels / day lower than that in 2019.

From the perspective of time cycle, the impact of the epidemic in the United States and Europe is mainly concentrated in the second quarter, and the demand for crude oil will recover rapidly in the third and fourth quarters, which is also based on the ideal situation that the epidemic in Europe and the United States has been effectively controlled and resumption of production. Among them, the crude oil demand in Europe and the United States is expected to return to the level before the outbreak in the fourth quarter. There are some differences in the Asia Pacific region. Although the low demand also appeared in the second quarter, after the recovery in the third and fourth quarters, the overall demand for crude oil is still quite different from that before the outbreak. Due to the effective prevention and control of the epidemic in China, the epidemic has been effectively controlled in the first quarter, and China has started to resume production orderly in the second quarter, so the lowest point of crude oil demand appeared in the first quarter, and the second quarter has entered the recovery period of crude oil demand.

The supply side variables are obvious, and the market logic is clear. Under the effect of low oil price, no oil producing country can rest easy. Even if there is no agreement to reduce production, the amount of natural clearing is not a few. The global alliance of production reduction instead protects the small countries with more vulnerable foreign exchange reserves, so that they can push up the oil price just by completing the agreement of production reduction, so as to support the national financial expenditure.

However, in terms of the latest OPEC crude oil production, OPEC countries were not generous in April. In the case of such a weak crude oil price, the overall production still increased significantly, and the total crude oil production increased in April one hundred and seventy-nine point eight 10000 barrels / day, the total amount reaches three thousand and forty-one point two 10000 barrels / day. In terms of countries, Saudi Arabias crude oil production has increased dramatically one hundred and fifty-five point six Million barrels / day, again back to 11.5 million barrels / day, creating the highest production in nearly 20 years. Saudi Arabia is also telling us with practical actions that if we do not reduce production, Saudi Arabia has enough capacity to completely destroy this market. UAE crude oil production increase thirty-three point two seven 10000 barrels / day, Kuwait crude oil production increased twenty-five point nine 10000 barrels / day.

Fortunately, however, the output growth in April was retaliatory and was also preparing for the production reduction in May. In the production reduction agreement in May, OPEC + reduced production by 9.7 million barrels / day, OPEC reduced production by 6.08 million barrels / day, and the output after the reduction was two thousand and fifty-nine point eight Million barrels / day, which means crude oil production will be lower than that in April nine hundred and eighty-one point four Ten thousand barrels per day, the comparison can be found that the quantity of production reduction is still awesome. Non OPEC countries undertake 3.61 million barrels / day of production reduction, of which Russia has the largest production reduction, reaching 2.5 million barrels / day. In addition, the OPEC monthly report also predicted that non OPEC countries would increase their crude oil supply by - 3.5 million barrels / day in 2020, compared with - 1.5 million barrels / day previously.

EIAs short-term energy outlook also lowered global crude oil demand expectations: the total global crude oil consumption is expected to be 92.59 million barrels / day in 2020, 95.52 million barrels / day previously, and 99.53 million barrels / day in 2021, 101.93 million barrels / day previously; the total US crude oil consumption is expected to be 18.27 million barrels / day in 2020, 19.13 million barrels / day previously, and 2021 The total consumption of crude oil in the United States is 1972 million barrels / day, which is expected to be 20.39 million barrels / day.

Looking at the EIA report, we mainly see the EIAs market outlook for the future. From the perspective of the supply and demand balance sheet, the market is in a serious state of excess in the first and second quarters, and in a state of supply shortage in the third and fourth quarters. The main logic is the rapid recovery of demand in the third quarter and the relatively low crude oil production in the second and third quarters. The whole 2021 crude oil market will be in a state of relatively tight supply.

In terms of months, the market surplus in the second quarter is mainly concentrated in April and may. There will still be a small amount of surplus in June, but the overall degree of surplus will be greatly eased. After July, the market gradually entered a state of supply shortage, which is expected to last for a long time. Therefore, from the perspective of the balance sheet, the market fundamentals gradually eased in May, but it is still in the state of surplus. Entering June, the market will reach the state of supply and demand balance, and the overall market is expected to be relatively optimistic.

From the perspective of the ratio of crude oil price to inventory consumption, OECDs inventory consumption is earlier than the arrival of the inflection point in the United States, but the final market expectation is a rapid rebound from the bottom. Of course, the arrival of the inflection point and the extent of the rebound depends on the epidemic control in Europe and the United States, and demand is still the most important variable determining the market. The price of crude oil and the difference between supply and demand can also reflect this problem. When the supply side remains at a low level, as long as demand can rebound, the market will go on an exceptionally smooth way of balance and rebound faster.

This EIA weekly crude oil report has two highlights: crude oil production and US crude oil inventory. In terms of crude oil production, the output of the United States fell by 300000 barrels / day last week. After the decline speed of 100000 barrels / day for several consecutive weeks, the previous weeks decline data was 200000 barrels / day, and the last weeks decline data was 300000 barrels / day. The decline has accelerated momentum. Current crude oil production has fallen to 2018 level, and it is expected that low oil prices will continue to affect US crude oil production.

OPECs expectation for US crude oil production is that it will decline by 2.1 million barrels / day to 10.65 million barrels / day at the end of the year, almost the level at the beginning of 2018, which is the starting point of this round of US crude oil production surge. EIA predicts that the annual average crude oil production in the United States will decline by 550000 barrels / day to 11.69 million barrels / day, and continue to decline by 790000 barrels / day to 10.9 million barrels / day in 2021. Obviously, the EIA forecast is more optimistic than OPEC expected.

Inventory was the biggest positive for the week. The rising US commercial crude oil inventory and Cushing crude oil inventory both declined slightly this week, and the markets worries about the expansion of the reservoir were greatly eased. But whether this weeks data is really the inflection point of inventory needs to be verified by next weeks data. If the refinery operating rate and refining input can stop falling and pick up next week, the crude oil inventory level in the United States will maintain a downward trend, which will play a strong supporting role in the market.

In addition, look at the U.S. oil product inventory. Gasoline inventory has declined a lot, but diesel inventory still maintained a large rise, mainly because the U.S. economy has not yet fully recovered. But as States return to work, U.S. diesel demand is expected to pick up and diesel inventories will stop rising.

To sum up, next weeks focus will be on US crude oil inventory levels and price performance. If the U.S. crude oil inventory can still decline next week, the U.S. crude oil commercial inventory rate will enter the cycle of destocking, which will play a strong role in the later price support. From the perspective of price pattern, WTI oil price has broken through the previous high, which is optimistic, but Brent oil price is still a step away from the previous high. If Brent oil price can also break through the previous high next week, the price upward path will be relatively smooth. Therefore, investors with strategic investment needs can properly arrange multiple orders and wait for the substantial verification of the rise. However, both the OPEC report and the EIA report predict that the situation will be greatly improved in June. Therefore, if the improvement in the supply and demand level is gradually confirmed, it will be difficult for oil prices to provide more comfortable opportunities for long drivers before the end of May. Im afraid that there will be no suitable price after June. Therefore, in addition to paying attention to the absolute price, we should also pay attention to the time factor. At present, we can see the market after June The market will be more optimistic. (authors unit: Haitong futures) the content of this article is for reference only, so the risk of entering the market should be borne by oneself. Source: futures daily Author: Yang an, Dong Shuo, editor in charge: Wang Xiaowu_ NF

To sum up, next weeks focus will be on US crude oil inventory levels and price performance. If the U.S. crude oil inventory can still decline next week, the U.S. crude oil commercial inventory rate will enter the cycle of destocking, which will play a strong role in the later price support. From the perspective of price pattern, WTI oil price has broken through the previous high, which is optimistic, but Brent oil price is still a step away from the previous high. If Brent oil price can also break through the previous high next week, the price upward path will be relatively smooth. Therefore, investors with strategic investment needs can properly arrange multiple orders and wait for the substantial verification of the rise.

However, both the OPEC report and the EIA report predict that the situation will be greatly improved in June. Therefore, if the improvement in the supply and demand level is gradually confirmed, it will be difficult for oil prices to provide more comfortable opportunities for long drivers before the end of May. Im afraid that there will be no suitable price after June. Therefore, in addition to paying attention to the absolute price, we should also pay attention to the time factor. At present, we can see the market after June The market will be more optimistic. (author unit: Haitong futures)