Yesterday, the SC2210 contract once rose more than 7.5% during the session, and finally closed up 5.19%. In addition, low-sulfur fuel oil (LU) rose more than 4%, and fuel oil closed up 3.55%.
Zheng Mengqi, an energy and chemical researcher at Hizheng Futures, told reporters that due to the upward trend in external crude oil prices during the holidays, crude oil prices rose sharply yesterday. First, expectations for negotiations on the Iran nuclear deal have declined again. Britain, France and Germany said that Iran has re-raised separate issues and is studying how to deal with Iran’s continued nuclear escalation without cooperating with the United Nations supervision agency. Previously, the negotiations were progressing well, and the market’s expectations for the resumption of Iranian crude oil supply have also increased. However, there are still differences between the parties to the nuclear agreement, and the incremental realization of Iranian crude oil returning to the market will continue to be delayed. Second, the U.S. dollar index has fallen back from its recent highs, and the macro pressure on crude oil prices has eased. After all the negative news in the early period, oil prices stopped falling and rebounded.
Looking forward to the market outlook, Zheng Mengqi said that from the supply side, it is difficult for U.S. crude oil production to expand significantly in the short term. OPEC has the say in the crude oil market. In October, OPEC+ will reduce production by 100,000 barrels per day, showing a strong willingness to support prices. On the demand side, the seasonal decline in processing volume caused by traditional autumn inspections of U.S. refineries has been priced in. Concerns about the energy crisis caused by falling natural gas prices have declined, and energy replacement demand expectations have also weakened accordingly. In addition, the Federal Reserve’s sharp interest rate hikes are still expected to bring about an economic recession, and the macro risks that suppress oil prices have not subsided. On the whole, the crude oil market is intertwined with bulls and bears. Short-term oil prices are still mainly oscillating. The mid- to long-term demand decline is difficult to hide, and the center of gravity of oil prices will gradually shift downward.
Li Yunxu believes that in terms of crude oil, it is still in a situation of high oscillation and grinding to the top with the inflection point of inventory difficult to confirm. The supply interruption of Beixi 1 has further exacerbated the European energy crisis. The relatively positive effect of high gas prices on crude oil prices and diesel cracking continues to appear. At present, It may be already in the lower part of the high oscillation range, so it is not advisable to be overly pessimistic. However, there is greater uncertainty in the production expectations of Iran and Russia in the later period. If one of them is confirmed to increase production next year, the inventory inflection point will be confirmed. By then, the risk of oil prices falling will increase, otherwise the high oscillation pattern will still be difficult to break. The fuel oil system fluctuates with crude oil. The pressure on high-sulfur cracking spreads continues but has highlighted the valuation advantages of deep processing and desulfurization towers. Low-sulfur fuel oil cracking spreads continue to be affected by high fluctuations in overseas gasoline and diesel cracking spreads. The increase in the number of short-term warehouse receipts has a negative impact on the internal market. This has created a certain amount of pressure, but the logic of strong diesel fuel has not yet been falsified against the background of the current decline in Russian oil product exports, and high low-sulfur price differences in near-end contracts may still be the norm.
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