The geopolitical situation is treacherous, and the international oil price has risen sharply
This week, IEA released its monthly report to raise the crude oil demand forecast for 2022. OPEC released the production increase data in January, which was far lower than the production increase target value. The situation in Russia and Ukraine tightened again, exacerbated the market’s concerns about short-term crude oil supply, and the international oil price rose sharply. As of February 11, Brent and WTI crude oil futures prices closed at US $94.44/barrel and US $93.10/barrel respectively. The US dollar index closed near 96.0.
The number of oil drilling rigs in the United States increased, and the crude oil inventory increased by 520000 barrels
This week, the number of active oil drilling in the United States increased by 19 to 516, and the total number of oil and gas drilling rigs increased by 22 to 635. U.S. crude oil inventories reached 410.4 million barrels, down 4.76 million barrels from the previous week; The total gasoline inventory in the United States was 248.4 million barrels, down 1.64 million barrels from the previous week; Distillate oil inventory was 121.8 million barrels, a decrease of 930000 barrels compared with the previous week.
In January 2022, OPEC output increased by 64000 barrels / day to 27.981 million barrels / day compared with the previous month
OPEC output increased in January 2021, with Saudi Arabia’s output of 9.999 million barrels / day, an increase of 54000 barrels / day over the previous month; Iraq’s output was 4.245 million barrels per day, a decrease of 26000 barrels per day; Iran’s output was 2.503 million barrels per day, an increase of 21000 barrels per day over the previous month; Venezuela’s output was 668000 barrels per day, a decrease of 50000 barrels per day compared with the previous month; Libya’s output was 1.008 million barrels per day, a decrease of 45000 barrels per day compared with the previous month. This week, the prices of naphtha, ethylene, propylene, butadiene and pure benzene increased, and the price difference of naphtha, PDH and MTO increased.
The pattern of supply and demand continues to be tense, and the geopolitical risk premium
This week, the fundamentals of crude oil supply and demand remained tight, the tightening of the geographical situation exacerbated the market’s concerns about the crude oil supply side, and the international oil price rose sharply. On the demand side, IEA released its monthly report in February, raising its crude oil demand forecast for 2022. It is expected that the global oil demand will increase by 3.2 million barrels / day to 100.6 million barrels / day in 2022; The low EIA inventory reflects that the trend of continuous recovery of crude oil demand has not changed, and the impact of the epidemic on the economy and crude oil demand is still relatively limited. On the supply side, OPEC only increased production by 64000 barrels per day in January, which is far from the target of 250000 barrels per day. The decline of OPEC’s effective idle capacity and the shortage of global oil and gas capital expenditure still restrict the repair of short-term crude oil supply; The uncertainty of the geopolitical situation exacerbated the market’s concerns about the supply side of crude oil. On February 11, the United States said that Russia could take offensive military action as early as next week, which further exacerbated the market’s concerns about the situation between Russia and Ukraine. To sum up, the tight fundamentals of crude oil supply and demand continue, and the geopolitical situation is volatile, which has brought great uncertainty to the short-term crude oil supply. We believe that the global crude oil supply and demand pattern will remain tight in 2022, continue to be firmly optimistic about the prosperity of the petrochemical sector and the upstream oil and gas enterprises represented by Petrochina Company Limited(601857) . Progress in the negotiations on increasing production of co19 + and co19 specific vaccines between Russia and Ukraine and the implementation of co19 specific vaccines between Russia and Ukraine.
Investment suggestion: we expect that the global crude oil supply and demand pattern will remain tight in 2022, so we continue to be firmly optimistic about the prosperity of the petrochemical sector. It is suggested to pay attention to the following subscripts: first, the upstream sector, PetroChina, Sinopec, CNOOC, Enn Natural Gas Co.Ltd(600803) ; Second, oil service sector, China Oilfield Services Limited(601808) , Offshore Oil Engineering Co.Ltd(600583) , Cnooc Energy Technology & Services Limited(600968) , Sinopec Oilfield Service Corporation(600871) , Bomesc Offshore Engineering Company Limited(603727) ; Third, large private refining and chemical sector, Hengli Petrochemical Co.Ltd(600346) , Rongsheng Petro Chemical Co.Ltd(002493) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Hengyi Petrochemical Co.Ltd(000703) , Tongkun Group Co.Ltd(601233) ; Fourth, light hydrocarbon cracking sector, satellite chemistry and Oriental Energy Co.Ltd(002221) ; Fifth, coal to olefins, Ningxia Baofeng Energy Group Co.Ltd(600989) ; The sixth and third largest chemical white horse, Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) and Jiangsu Yangnong Chemical Co.Ltd(600486) .
Risk analysis: geopolitical risk, the spread of Omicron strain, and the rapid growth of OPEC + production.
