At around 12:00 on the 23rd, Beijing time, a 400-meter-long container ship lost control in the single channel of the Suez Canal due to a sudden power loss in the engine room, blocking the Suez Canal laterally. Because it was a heavily loaded ship, both its bow and stern had been stranded on the shore. The unexpected incident caused traffic jams in both directions in the Suez Canal.
The Egyptian government is organizing local workers to carry out rescue operations. Small tugs and land excavators spent a whole day trying to dig out the place where the ship’s bow was stuck. However, due to the large size of the freighter, there is still no progress.
As of early Thursday morning, this traffic artery, which connects 12% of the world’s cargo trade, continues to be closed, with a total of nearly 200 cargo ships currently blocked. Both ends of the canal. The market currently has different opinions on when the blockage of the Suez Canal will be lifted, ranging from a few hours to a month. According to data from the Suez Canal Authority, nearly 19,000 ships passed through the canal in 2020, an average of 51.5 ships per day; if the Suez Canal fails to be dredged in time, world shipping prices may fluctuate greatly. Data from oil analysis agency Vortexa shows that 10 oil tankers carrying 13 million barrels of crude oil may be affected by the blockage of the Suez Canal.
The Suez Canal is one of the three important chokepoints for global oil transportation, the other two being the Strait of Hormuz and the Bab el-Mandeb Strait. In 2015, nearly 59 million barrels of oil were transported by sea every day in the world, accounting for 61% of the world’s total production. These three major transportation arteries carried more than 90% of the transportation capacity.
In addition, German Chancellor Merkel said that she was “wrong” in supporting the Easter blockade and decided to abandon the Easter blockade plan. After the relevant news was released, the market generally believed that this move would help boost European demand for crude oil.
Affected by emergencies, international crude oil prices rebounded strongly. At 1 a.m. on Thursday, WTI crude oil futures rose by 6%; Brent crude oil futures rose by more than 6%. As of Thursday morning’s close, WTI May crude oil futures closed up 5.92% at US$61.18/barrel; Brent May crude oil futures closed up 5.95% at US$64.41/barrel, both of which were the main contracts since November 9 last year. The largest closing gain erased most of the previous day’s losses.
The oil market is currently showing signs of weakness. Market participants generally believe that the Suez Canal news will only have a short-term impact. The core impact of the recent sharp correction in oil prices is the resonance of supply and demand and macroeconomic drivers. Some institutions said that the strong rise in international oil prices on Wednesday was not entirely caused by the news of the blockage of the Suez Canal. The core factor was still the recovery of the previous trading day’s sharp drop.
On Wednesday local time, Federal Reserve Chairman Powell objected to excessive concerns about the rise in U.S. bond yields at a hearing, which was in line with his consistent view. Powell believed that this was due to the optimistic economic outlook, and vigorously Confirming the extent of the labor market recovery, Powell also reiterated his expectation that inflation will “temporarily rise” this year.
During his speech, the Nasdaq stopped falling and turned up after hearing the news, the U.S. stock market index expanded its collective gains, and U.S. bond yields gradually fell. But the good times did not last long. As the decline of technology stocks expanded in late trading, the three major U.S. stock indexes collectively plunged, and the S&P and Dow Jones Industrial Average turned negative one after another. In the end, the three major indexes collectively closed lower for the second consecutive day. The Nasdaq closed down 2.01%, hitting a new closing low since March 8. The S&P closed down 0.55% and the Dow closed down 0.01%, both hitting new lows since March 10 for the second consecutive day. Chinese concept stocks fell collectively when the U.S. Securities and Exchange Commission began to implement the Foreign Company Accountability Act. Tencent Music and Vipshop fell by more than 20%, iQiyi fell by nearly 20%, and Xpeng Motors and Li Auto fell by more than 10%. , Bilibili fell more than 9%, Baidu and Pinduoduo fell more than 8%.
The resonance of supply and demand and macro-driven factors have caused the current weakness in the oil market
In fact, the current oil market is showing signs of weakness. Oil prices fell sharply by more than 6% on Tuesday after suffering a sell-off that plunged to their lowest levels since early February, taking them to a drop of more than 12% in less than two weeks. Oil prices rebounded slightly on Wednesday, with WTI crude oil futures briefly reaching $59 per barrel, but market participants generally believe that the news about the Suez Canal will only have a short-term impact.
Li Yunxu, a crude oil researcher at SDIC Essence Futures, told the Futures Daily reporter that based on data from Bloomberg and EIA, from 2012 to 2018, the average daily crude oil transportation volume from south to north in the Suez Canal was about 130 tons. million barrels per day, and the average daily north-to-south crude oil transportation volume is about 500,000 barrels per day. However, with the increase in U.S. crude oil production, the decline in Iranian crude oil exports, and the advancement of OPEC production cuts, south-to-north and north-to-south transportation volumes have tended to trend in the past two years. In balance, they are all between 500,000 and 1 million barrels per day. The potential maximum impact of this congestion on crude oil transportation volume may be around 2 million barrels per day, which is less than 2% of global crude oil consumption. Relatively speaking, the two-way transportation volume of refined oil products through the Suez Canal is greater than that of crude oil. In normal times, the one-way transportation volume of refined oil products may be more than 1.2 million barrels per day. Naphtha is mostly used from north to south, and middle distillates are mostly used from south to north. Based on this, it is roughly estimated that the impact of this congestion on crude oil and refined oil products may be around 4.5 million barrels per day, and partial supply cuts may have a certain positive emotional effect on oil prices.
“For domestic oil futures, currently��The trading volume of the Shanghai and Shenzhen stock markets continues to be at a low level, which to a certain extent shows that market sentiment is biased towards caution, coupled with the comprehensive impact of factors such as institutions’ continued position adjustment, fund redemptions, early selling pressure on hold-up orders, and investors’ reduction of positions. , the market lacks the power to resonate upward. “Chen Chang said.
During the market adjustments on Tuesday and Wednesday, the cyclical sector performed particularly poorly. Chen Chang said that on the one hand, it was due to the State Reserve’s dumping of aluminum ingots. The news and the decline in international oil prices have had a negative impact on the sentiment of the cyclical sector. On the other hand, when market sentiment is biased towards caution, funds have the motivation to cash in their gains.
” Against the background of the indescribable improvement in the micro-liquidity of the stock market, the market is expected to maintain an oscillating pattern in the second quarter. Considering that market differentiation has eased after the early sharp decline, valuations have declined, and the fundamentals of the domestic economy are still improving, it is unlikely that there will be another sharp decline at the short-term index level. If the market can successfully digest the negative impact of rising interest rates in the first half of the year, the beta opportunities at the index level in the second half of the year are worth looking forward to. “Chen Chang said.</p
