Since early June this year, Brent oil prices have fallen by 25%. Judging from the decline last week, Brent crude oil futures for October fell by 8.7%, and WTI crude oil futures for September fell by 9.74%. Some industry insiders raised questions, has crude oil entered a “bear market” or entered a correction zone?
However, just this Monday, crude oil, fuel oil and some chemicals experienced a retaliatory rebound. This performance is directly related to the overall rebound in risk appetite in the commodity market. “On Friday night, as the U.S. non-agricultural data was stronger than expected, the market launched an overall rebound after a short period of weighing, and energy chemicals, blacks, oils, etc. all rebounded sharply.” Head of energy chemical R&D at Haitong Futures Yang An said.
According to Zhong Meiyan, director of energy and chemical industry of Everbright Futures, the rebound intensity of energy and chemical sector varieties on Monday varied. The common logic behind it is that raw material prices have stabilized, and varieties with stronger fundamentals will rebound first. Among them, the main contract futures price of low-sulfur fuel oil once again stood at the integer mark of 5,000 yuan/ton. Fuel oil inventories in the Singapore market are expected to decline. Diesel prices on the oil product side will still strengthen in the later period, and the price support for low-sulfur fuel oil will continue.
According to the reporter’s understanding, on the supply side, the weekly data on U.S. crude oil production has not changed much. Faced with the pressure of the mid-term election, Biden took the initiative to ease the conflict with Saudi Arabia. However, in the end, OPEC+ only agreed to increase production by 10% in September due to low idle production capacity. Thousands of barrels/day. Russian crude oil supply continues to grow, and Libyan crude oil production has gradually recovered to 1.2 million barrels per day. On the demand side, the cracking price difference of external gasoline, diesel and fuel oil fell, refinery operations declined, crude oil inventories and gasoline inventories increased. According to EIA data, gasoline demand weakened. Judging from the monthly difference structure, the sharp rise in prices in recent months and far months is gradually easing, and the supply and demand in the crude oil market are loosely balanced.
“Diesel cracking has fallen back from its high level, and Singapore arbitrage cargo inflows will gradually increase. Superimposed on the increase in low-sulfur supply from Asian refineries, the supply of low-sulfur fuel oil will increase as diesel cracking declines. Due to high temperature weather, Saudi Arabian fuel oil imports in July Increase, the demand for high-sulfur fuel oil power generation is relatively good.” Zheng Mengqi, an energy and chemical researcher at Hizheng Futures, said. In addition, the environmental protection inspection in North China has ended, and the daily output of asphalt has increased. Some of Sinopec’s main refineries in Shandong have switched to residual oil and asphalt production on August 6. Production profits have improved compared with the previous period, and supply has gradually increased. Asphalt inventory levels are currently low, demand is gradually improving, and refinery shipments are stable.
Yang An believes that the current overall supply and demand pattern of the crude oil market has changed from obvious progress in the first half of the year to a tightly balanced situation. According to the judgments of OPEC and EIA, the crude oil market will have a surplus of about 800,000 barrels per day in 2022. Inventories in the crude oil market have been declining since the second quarter and are gradually accumulating. Judging from EIA’s energy outlook, the accumulation of crude oil will mainly occur in the second half of the year. As the supply side OPEC, the United States and other production continue to grow, the reduction caused by Russian sanctions is significantly smaller than expected, while on the demand side, as the demand for crude oil increases under the pressure of economic downturn, The volume was weaker than expected at the beginning of the year, and the effect of supply and demand on the crude oil market in the second half of the year was significantly weakened in pushing up oil prices.
“The current status of the energy and chemical sector is that raw materials have brought downward pressure on costs, weak demand has dragged down prices, and different inventory levels determine the strength of varieties. The corresponding valuation changes of each variety are different. From the perspective of energy varieties, it depends The strength of oil prices, downward oil prices have led to the restructuring of energy costs, and the price center of gravity has shifted downward. From the perspective of chemical products, it depends on the seasonality of terminal demand. The current supply and demand of polyester are both declining, and prices fluctuate with crude oil, while the downstream demand for polyolefins Marginal improvement will support prices,” Zhong Meiyan said.
Regarding the future trend of crude oil, Zheng Mengqi believes that the current U.S. crude oil inventory has rebounded to the lower edge of the same period in the past five years. Although gasoline inventory is lower than the same period in previous years, it is accumulating slightly. Refinery operations have declined, and the demand brought by high oil prices has been negative. Feedback is gradually emerging. In the medium to long term, the center of gravity of crude oil prices will gradually shift downward, focusing on the macro risks brought about by the release of U.S. CPI data this week.
“For oil prices, factors including the Federal Reserve’s monetary policy and the global economic downturn are increasingly influential at the macro level, and the supply and demand side of the crude oil market has gradually begun to exert downward pressure on oil prices. Judging from the poor structure and the continued decline in refined oil cracking profits, the probability of oil prices turning around in the third quarter is still high. In the short term, oil prices continue to fall from highs, and the $90/barrel line is of great significance to bulls. If overall As the commodity market recovers, oil prices may rebound, but the probability of reversing the trend is still relatively small. After the rebound is in place in the later stage, the center of gravity of oil prices is expected to continue to decline.” Yang An said.
On August 8, PTA prices rebounded following crude oil prices. Zhong Meiyan told reporters that PTA supply-side maintenance has been strengthened and supply pressure has eased. On the demand side, Jiangsu and Zhejiang have issued orderly power consumption policies for some textile bases to cope with peak power shortages. The demand-side load may decline. It is expected that the cash flow profits of subsequent end products are expected to improve, thereby supporting raw material prices. From the perspective of PVC and methanol, there has been a continuous sharp decline.The rebound recovery of � is based on the expected marginal improvement in seasonal peak season demand, and the supply side has shrunk against the background of losses. Therefore, there may be room for prices to continue to rebound until the profits of the industrial chain are rebalanced.
It is reported that from the perspective of PTA’s industrial structure, PX operating rate is low and prices are relatively strong; PTA processing fees are at low levels, and operating rate is compressed to a low range; negative feedback from the textile terminal is still there, and polyester operating rate is stable at 81.76%. When the polyester operating rate declined in the early stage, PTA had expectations of inventory accumulation. However, under the background of the continuous decline of PTA operating rate, PTA’s inventory accumulation pressure is not great in the near future.
“The factors that disturb the rise and fall of this sector. From the profit distribution of the industry, the profits of the polyester industry chain are still at the cost end, and PTA processing fees remain low. Although the profits of the polyester end have been restored due to the decline in PTA prices, the textile terminal The weakness is still there, and there is insufficient power to recover short-term profits. Therefore, crude oil prices are still the dominant factor in PTA prices.” Xie Wen, senior analyst at Wuchan Zhongda Futures, said that from a far-month perspective, the pressure for PX and PTA to start production corresponding to the 2301 contract Larger, PTA demand is unlikely to improve beyond expectations, and PTA accumulation pressure is expected to increase. In addition, there is a high probability that the range of forward crude oil will move downward, and the trend of PTA in the far month may be under pressure.
Zhong Meiyan believes that the market outlook for the energy and chemical sector will continue to fluctuate violently, influenced by macro factors such as the Russia-Ukraine conflict and the Federal Reserve’s interest rate meeting, as well as factors such as import changes, inventory levels, and device operating rates on the industrial side. Under high volatility, you can pay attention to the relative strength differences of energy and chemical sector varieties, and the profits or sustainable recovery of downstream products.