EIA inventories continued to decline and oil prices rebounded this week
This week, the mild symptoms of Omicron mutant weakened the market’s concern about its impact, the inventory of crude oil and refined oil in the United States decreased, the oil demand recovered, and the international oil price rebounded. As of December 31, Brent and WTI crude oil futures prices closed at US $77.78/barrel and US $75.21/barrel respectively. The dollar index traded near 96.0.
The number of oil drilling rigs in the United States was the same as last week, and crude oil inventories decreased by 3.58 million barrels
This week, the number of active oil drilling in the United States was the same as last week, with 480, and the total number of oil and gas drilling rigs was the same as last week, with 586. US crude oil inventory was 420 million barrels, 3.58 million barrels less than the previous week; The total gasoline inventory in the United States was 227.7 million barrels, a decrease of 1.46 million barrels over the previous week; Distillate stocks were 122.4 million barrels, a decrease of 1.73 million barrels over the previous week.
OPEC output increased in November, increasing by 285000 barrels / day to 27.717 million barrels / day compared with the previous month
OPEC output increased in November, with Saudi Arabia’s output of 9.867 million barrels / day, an increase of 101000 barrels / day over the previous month; Iraq’s output was 4.24 million barrels per day, an increase of 91000 barrels per day over the previous month; Iran’s output was 2.474 million barrels per day, a decrease of 9000 barrels per day over the previous month; Venezuela’s output was 625000 barrels / day, an increase of 15000 barrels / day over the previous month; Libya’s output was 1.14 million barrels per day, a decrease of 15000 barrels per day compared with the previous month.
This week, naphtha, ethylene and butadiene prices fell, propylene prices were the same as last week, and pure benzene prices rose. Naphtha and PDH spreads fell while MTO spreads rose.
Economic recovery has led to a sustained recovery in demand, and oil prices have continued to rise in the past 21 years
In 2021, OPEC + production increased orderly, the epidemic eased, and the global economy began to resonate and recover, driving the strong recovery of crude oil demand. The crude oil production increase was less than the demand growth. The oil price center in 2021 increased significantly compared with 2020. On the demand side, although the impact of events such as delta virus and Omicron virus has caused demand concerns since 2021, the demand side of crude oil has shown a sustained recovery throughout the year, and the resumption of work and production has boosted fuel demand and industrial demand. On the supply side, OPEC + increased production in an orderly manner, the US shale oil capital expenditure increased insufficient, the US crude oil supply increment was limited, the EIA inventory continued to decline, and the supply remained tight. Several rounds of epidemic spread in 2021 raised market concerns about demand, resulting in several pullbacks in oil prices during the year. However, on the whole, crude oil supply and demand continued to repair, and oil prices maintained an upward trend throughout the year. Looking forward to 2022, the global economy will continue to recover, OPEC + and the United States will gradually increase production, while under the background of “carbon neutralization”, the overall capital expenditure of the global oil service industry will show a downward trend, and the crude oil supply will gradually shrink. We believe that the pattern of crude oil supply and demand may continue to be repaired. However, in the short term, the spread of Omicron covid-19 virus variant may reduce market demand expectations. Iran’s nuclear negotiations may push Iranian crude oil to the international market, thus significantly increasing supply. There is uncertainty about the recovery rate of shale oil production in the United States, and the pattern of crude oil supply and demand may fluctuate. In the follow-up, we will continue to focus on the development trend of Omicron strain, the progress of covid-19 specific drug R & D and vaccination, the implementation of OPEC + production increase plan, the progress of Iran nuclear agreement negotiation, etc.
Investment suggestions: we expect that the overall pattern of crude oil supply and demand will be good in the future, so we continue to be optimistic about the prosperity of the oil and gas 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 plate, 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 plate, 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 horses, 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 output growth of the United States is too fast.
