The third energy transformation has come. Human history has experienced two major energy transformations from firewood to coal and from coal to oil. Each transformation is accompanied by the improvement of the leading energy density, which has greatly promoted the growth of GDP and population. Facing the increasingly serious problem of carbon emission, carbon neutralization has become a global consensus. Reducing the use of fossil energy and finding alternative energy have become the general trend, and the third energy transformation has quietly begun. We believe that the realization path of the third energy transformation is: first, take natural gas as the transitional energy to replace coal and oil to achieve carbon peak; Under the guidance of the goal of carbon neutralization, hydrogen and wind energy will become the leading energy in the end of energy transformation.
In the context of energy transformation, crude oil will still maintain a high profile. In the context of carbon neutralization, new energy has accelerated its penetration. However, we believe that traditional energy still has an irreplaceable position in the era of energy change, and the unique global supply and demand pattern in the post epidemic era will maintain the high profile of oil and gas. We expect that China’s crude oil production will maintain stable growth until at least 2025, and the “three barrels of oil” will continue to play the role of “stabilizer” of energy supply. The development of China’s crude oil production industry under the objectives of chemical rigid demand and supply guarantee will fully benefit upstream crude oil producers and oil service enterprises.
The demand for petrochemical industry is irreplaceable. IEA predicts that the global demand for crude oil will peak in 2025. Crude oil is an important chemical raw material, and its important uses cannot be replaced in the short term. Crude oil and crude oil products are not only necessities for people’s livelihood, but also important materials for modern industry, agriculture and national defense. There are a large number of fuel vehicles in the world, which will ensure that the fuel demand for crude oil will remain stable in the short term. IEA predicts that the global crude oil demand will reach the peak of 97 million barrels / day in 2025, remain basically stable until 2030, and finally fall to 77 million barrels / day in 2050.
The superposition of demand recovery and production increase is slow, and the global crude oil supply and demand is tight in 2022. On the demand side, in the post epidemic era, the global economy gradually recovered, and Omicron spread widely. However, due to its mild symptoms and limited impact on the global economy, the demand for crude oil continued to recover; On the supply side, OPEC + has insufficient idle capacity and is unable to fulfill its commitment to increase production by 400000 barrels per day per month; Under high oil prices, US shale oil manufacturers tried to expand production, but Duc’s Cliff like decline seriously limited its subsequent production potential; Under high oil prices, the capital expenditure plans of global oil and gas giants are more cautious and the growth rate is low. In 2022, global crude oil supply and demand will remain tight, adding geopolitical instability factors to increase the risk premium of crude oil. We expect that the oil price center will remain at $70-80 / barrel in 2022, and the high outlook of crude oil will remain.
Investment suggestion: we believe that the demand for crude oil has increased steadily under the background of energy transformation, and it is expected that the global crude oil supply and demand pattern will remain tight in 2022. Therefore, 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) .
Risk tip: risk of epidemic spread, geopolitical risk, and risk of excessive growth of OPEC output.